With data use soaring across the globe, it’s no surprise that mobile users emerging markets are increasingly hungry for services which place greater pressure on bandwidth – and operators are definitely feeling the strain. Fortunately, a total infrastructure upgrade is not the only option for operators in these regions, as Adrian Liu of Blue Coat explained to DT editor James Barton.
DT: The demand for data in emerging markets is increasing – why is infrastructure not able to cope in its current form?
AL: There are over 2 billion internet users across the world, and about 600 million have access to broadband. That number will reach 800 million by the year 2014. With more users – on faster connections – there is much more data use, with video in particular making up around half of all content that is being downloaded.
From what we have seen, bandwidth demand is outpacing bandwidth supply. The broadband demand is due primarily to the recent explosion in video and large files, with users hungry for access to broadband with much faster connections. Though service providers typically plan for growth, there has been an unforeseen spike above and beyond their planning cycles. According to a May 2011 poll by Light Reading and Blue Coat, one of the top dilemmas service providers are experiencing is managing the Web 2.0 & video overload.
In areas such as Africa, Eastern Europe, Middle East, and South Asia where bandwidth demand is high, there’s a huge need for a caching solution as infrastructure is built out and more people have access to large files. It makes sense to get the content closer to the user, and allows operators to save on their upstream bandwidth.
DT: So caching solutions are the affordable way of expanding capacity for emerging market operators?
AL: The cost of bandwidth in areas such as Thailand and Cambodia is around US$100 per Mbps per month, so the ROI on a caching solution is well under 12 months. As they’re paying so much for bandwidth, the saving is almost immediate, so it just makes sense for operators to install a caching solution.
Even three years ago, some of our legacy customers were seeing their data demand doubling year over year. The need for greater bandwidth had started to become a real cost issue for them – they were having to upgrade their infrastructure every 6 months to keep up with demand.
For example, we have a customer in Jordan which now has over 2 million subscribers – when they installed our CacheFlow solution last year, they saw immediate savings of around 40% on bandwidth, so the ROI translates just as much.
DT: What are the advantages of finding a caching solution now rather than later?
AL: One of the main advantages of finding a caching solution now rather than later is that service providers can delay/manage spending for bandwidth infrastructure costs. For those who are addressing the cost issue due to unexpected growth or even a planned growth, where the costs are high, they now have a choice to delay this spending.
Another important benefit for finding a caching solution today is that these service providers will be better positioned for their customers to experience faster download times. This improved experience will lead to fewer support calls which leads into customer retention. A caching solution today will also provide a shock absorber for the service providers as they will be able to manage unexpected traffic spikes due to unforeseen internet events.
A third argument for immediately adopting a caching solution is that service providers can use advanced caching architectures to keep pace with the web as it develops, especially with rich Web 2.0 content and video.
DT: Why is bandwidth so expensive in many emerging markets?
AL: Bandwidth costs are expensive in many emerging markets mainly due to the high bandwidth growth and demand. Though we have seen bandwidth pricing drop in some emerging markets, the cost per Mbps/month are still very high where the ROI of a caching solution is still very beneficial to the customer.
DT: What is the relationship between the availability of infrastructure and the cost of bandwidth?
AL: It seems to make sense that as more availability of infrastructure becomes available, the cost of bandwidth should also come down due to pure supply and demand economics. Having said that, there is a global trend across emerging and established markets where there will be more broadband users using faster connections. This translates to service providers around the world planning for infrastructure expansions to accommodate this growth. It will be interesting to watch this growth demand curve to see if it continues to outpace the cost/supply in the upcoming years.