Why More Internet Use Is Not Breaking Broadband Networks

There is a common claim in telecom policy debates that growing internet traffic is becoming “unsustainable” for network operators. The evidence suggests the opposite. The global internet economy has grown rapidly over the last decade. Between 2008 and 2020, the market value of the global internet value chain quadrupled. During the same period, the connectivity sector — the companies that build and operate broadband networks — more than tripled in value. This is not a sector in decline.

A major reason for this growth is the relationship between content and connectivity. Online content and services drive demand for broadband. People subscribe to faster and larger data packages because they want to stream video, use cloud services, access social media, play games  and communicate online. That demand increases revenues for broadband providers, which then invest in expanding and upgrading their networks. The connectivity sector also remains financially strong. Broadband operators continue to report healthy profitability, including relatively high EBITDA margins and returns on equity. There is little evidence that the market is structurally failing because of rising traffic volumes.

Content providers have also become major investors in digital infrastructure. Companies such as Google, Meta, Amazon and others now invest directly in submarine cables and local content delivery systems. Projects like the Asia Pacific Gateway submarine cable have helped expand international bandwidth and improve connectivity across regions.

At the local level, content caches and data centres reduce the distance data must travel across networks. This lowers costs and improves performance for users. These investments have changed the economics of broadband delivery. The cost of carrying data — often measured as network cost per gigabyte — has steadily declined over time. Better international connectivity, more efficient equipment and local caching all help operators deliver larger volumes of traffic at lower incremental cost. This directly challenges the idea that increasing internet use places an unbearable burden on telecom operators. In practice, networks have become more efficient as traffic has grown. Higher usage has coincided with falling unit costs, expanding capacity and broader connectivity benefits for society and the economy. Rather than being a threat to broadband sustainability, growing internet use has largely reinforced the business case for continued investment in digital infrastructure. You can download the full report here.