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Interconnection bandwidth in Asia Pacific to grow more than fourfold by 2020

Anuradha Shukla | Sept. 5, 2017
Cloud and IT services providers across the region are predicted to overtake telecommunications providers as the largest users of interconnection bandwidth by 2018.


Interconnection bandwidth in Asia Pacific is expected to see more than four times growth between 2016 and 2020, according to Equinix's Global Interconnection Index.

Interconnection bandwidth is defined as the total capacity provisioned to privately and directly exchange traffic with a diverse set of counterparties and providers at distributed IT exchange points. It basically shows how ready an industry or region is to maximise interconnection.

According to the study, Asia Pacific is set to grow at a 46 percent Compound Annual Growth Rate (CAGR) to reach more than 1,120 Tbps of installed capacity by 2020, which is nearly a quarter (22 percent) of interconnection bandwidth globally. This will make the region the second fastest growing region after Latin America.

Singapore is expected to continue to lead the Asia Pacific region in terms of having the largest interconnection bandwidth capacity among major other metros from 2016 to 2020.

"As highlighted in the Global Interconnection Index, the Asia Pacific region is forecast to outpace both the US and EU in terms of interconnection bandwidth by 2020," said Samuel Lee, president of Equinix Asia-Pacific. "This is consistent with the economic predictions that show Asia Pacific will overtake the US and UK as the largest regional economy globally, meaning there has never been a better time for businesses in the region to embrace the multiple opportunities offered by digital transformation."


Cloud and IT services providers to be the largest users 

Cloud and IT services providers across the region are predicted to overtake telecommunications providers as the largest users of interconnection bandwidth by 2018.

Banking  and insurance, which is expected to grow at a CAGR of 71 percent, will share 13 percent of the total interconnection bandwidth by 2020, compared to only 7 percent in 2016.

Other industries expected to experience the explosive growth in interconnection bandwidth by 2020 include energy and utility (82 percent), healthcare and life sciences (74 percent), government and education (69 percent), as well as business and professional services (68 percent).

Key macroeconomic, technology and regulatory trends that are impacting interconnection growth on a global level include digital technology use, urbanisation, cybersecurity risk, and global trade of digitally deliverable services.

"Some of the greatest technology trends of our lifetime, including mobile, social, cloud and the explosion of data, are creating disruption on the scale of the Industrial Revolution," said Sara Baack, chief marketing officer for Equinix, Inc.

"In this new reality, it's a 'scale-or-fail' proposition and companies are succeeding by adopting Interconnection, locating their IT infrastructure in immediate proximity to an ecosystem of companies that gather to physically connect their networks to those of their customers and partners. Interconnection helps fuel digital transformation by supporting multicloud consumption at scale, improving network latency and performance, enabling greater operational control, and reducing security risk," she added.


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