The IP business is booming as enterprises expand their use of VoIP, video and other real-time applications. Service providers continue to compete fiercely for this business, but there is no denying one fact: the battleground is shifting. The real growth opportunity for enterprise networks isn’t going to be where their customers are today, but rather where they will be – in new and emerging markets, which represent the lion’s share of broadband growth in the coming years.
According to the latest figures, at the end of last year, only 34% of households in developing countries had internet access, compared with the more than 80% in developed countries. The lack of reliable broadband infrastructure in many of these areas has been a major roadblock – one service providers are eager to remove as they look to enter emerging geographies and drive new revenue opportunities.
It’s a golden opportunity for anyone willing, and able, to grab it. But adding new infrastructure to large-scale networks with speed and agility isn’t easy, especially when market conditions constantly shift. Service providers face a unique set of competing forces:
- The high cost of network expansion – Expanding enterprise Ethernet or MPLS networks organically with fiber remains a slow, incremental process that involves significant capital expenditures. If we’re talking about rural or remote parts of the world, which feature prominently in emerging markets, it can be cost-prohibitive. Often, by the time a provider is able to put infrastructure in place, customers have moved on to other providers or technologies that got to them first.
- Quality of service – Moving into a developing market often means leasing with a local provider or paying a local provider to build out in the desired region. This can help extend reach, but it doesn’t guarantee the local provider can effectively meet the desired quality standards and maintain established SLAs.
- Growing price pressures – The commoditization of broadband services and relentless competition has made it increasingly difficult for providers to innovate and drive profitability. They need to make the necessary investments to jump-start new services and deliver enterprise-grade connectivity anytime, anywhere – but face increasingly tight margins, with whole segments of their traditional wireline business decreasing.
Enter the Globalized Network
Extending enterprise networks in new geographies requires a combination of terrestrial and satellite capabilities, as well as truly global network capabilities – what we refer to as the Globalized Network.
Until this year, ground and satellite technology could only extend enterprise networks so far before it became both impractical and cost-prohibitive in many areas of the world. However, the launch of new high-throughput satellites (HTS) has dramatically changed the game – providing a key missing piece of the connectivity puzzle. HTS systems deliver much greater capacity, efficiency and availability for bandwidth-hungry applications at a significantly lower cost per-bit. With HTS incorporated into the Globalized Network, it’s now possible to profitably meet the demand for enterprise-grade connectivity – anywhere in the world.
What does this mean for enterprise network service providers?
- No costly, slow infrastructure build-out to extend Ethernet or MPLS networks.
- Quick response to new market opportunities – anywhere in the world.
- High-speed capacity to cost-effectively support new revenue-generating services.
Next Step: Network Expansion Considerations
Today the capabilities exist to solve the world’s most pressing connectivity challenges. But to make network expansion a competitive and cost-effective investment, there needs to be a scalable business model and redundant, highly resilient global network infrastructure in place. Connectivity needs to be simple to access and reallocate on demand – all while minimizing risk. The last thing service providers need is to add more network complexity and capital expenditures to their projects.
In the meantime, learn about IntelsatOne Flex for Enterprise, a managed service that allows regional and global enterprise network service providers to efficiently access and incorporate HTS technology into new and existing private networks.