Nearshore Americas
network traffic

Demand for High-Speed Internet Will Keep Rising, Even After Lockdowns

With cities and countries around the world facing lockdowns and quarantines, work-at-home has become a necessity in the times of COVID-19. The Nearshore IT and BPO sectors have mounted massive efforts to transition hundreds of thousands of workers into domestic workplaces. But as the streets of the cities become empty, companies and employees now worry about another type of traffic jam: network bottlenecks.

What implications does increased usage of residential Internet connections have for businesses? And what can companies, workers, and Internet Service Providers (ISP) do to adapt to the new world we are all living in? Gilles Maury, Leader of Innovation for Consulting for Spanish Latin America at Deloitte, thinks that because of how exceptional the current crisis is, it is still too soon to know where the limits are, and when they will surface.

Gilles Maury
Gilles Maury, Leader of Innovation for Consulting for Spanish Latin America at Deloitte.

“The first thing to consider is that every time there is a crisis, a hurricane or anything of the sort, Internet traffic always increases rapidly and creates a strong demand over the network in general,” Maury told Nearshore Americas.

The difference right now is that this increase in traffic is happening all around the world and that a lot of it is moving from the companies, which more commonly have optic fiber and dedicated networks, to homes, where connections are more widely based on ADSL or cable.

“When companies buy a one to five services with a speed of 100 Mb/s, they have a guarantee that there will be a maximum of five users at the same time sharing the bandwidth. With homes, the situation is very different. There is no guaranteed relation, and in real life, speeds will depend a lot on the neighborhood where the house is located,” Maury said.

What Can Be Done?

In the Nearshore market, workers have already complained about lower speeds, and some providers are working directly with ISPs to push for faster, more consistent speeds. There is a growing expectation that the longer lockdowns continue, the more vulnerable networks will become. In Italy, the increase in traffic reached 300%. Problems in Europe led Netflix, for instance, to reduce the bit rate of its streaming service, to ease pressure on the network.

In Latin American, Maury expects the most significant point of weakness is in the last mile of network distribution. In his opinion, ISPs in the region have a strong backbone that can guarantee reasonable access. However, they remain accountable for the quality of links that are closest to the end customer.

Greg Bryan, Senior Manager of Enterprise Research at TeleGeography, agrees, and points out the last mile issue is something that ISPs and users should be looking at right now.

“If you have all of a sudden five or six people in the house and your broadband modem at your home broadband connection isn’t used to having that many devices, your Wi-Fi starts to slow down. And then you have the neighborhood aggregation points, in the DSL world, the DSLAM or whatever aggregation point, depending on what kind of broadband you have now. Those are a potential place for traffic jams and the, just the quality and availability of broadband, obviously, is going to vary a lot around the world,” Bryan told Nearshore Americas.

Bryan says that in the urban and suburban areas of developed markets, users tend to have 50 to 100 Mb/s broadband connections. In Latin America, speeds might be lower. Still, Maury doesn’t see a problem either in speeds or broadband access for Nearshore workers, who tend to be located in main cities of countries with solid network infrastructure.

“So, the issue it’s not so much the broadband speeds, but it’s the pain points of increased traffic on those that a lot of providers have been scrambling to make sure it still works. But then the other issue, I think, that emerges is, if you have folks using something like say IPsec VPNs trying to get into the intranet or the WAN, then you also have possible constriction points at the data center at the co-location facility where those gateways are, where those gateways just weren’t prepared for that number of distributed workers,” Bryan explained.

Amid these challenges, Maury sees solutions in the short, mid, and long term. For instance, users can upgrade their Internet speed with their provider to obtain a higher throughput – even when there no minimum speed guarantee.

On the ISPs’ side, providers should identify the location of full nodes, and consider splitting them. Other solutions would require investments, like mesh networks, that connect the user to a fix or mobile network according to bandwidth availability.

The Post-Pandemic Network

At this point, there is no clear end date for quarantines and lockdowns all over the world. But by the time the world moves back to a more ‘normal’ state, Maury believes that companies and consumers will have already established new work dynamics that will continue to put a strain on the network that was not there before the pandemic.

Greg Bryan
Greg Bryan, Senior Manager of Enterprise Research at TeleGeography

Bryan also considers that many employees will continue working at home after their bosses and clients realize that they can remain productive remotely. What does this mean for the future of networks, and how they will handle the increased traffic?

The main difference between business and consumer Internet services is the speed guarantee, says Maury. Other variations are static IP addresses and firewalls. For Bryan, after this, ISPs might start offering similar guarantees to residential customers.

“That’s already the case. It’s something a lot of residential customers can call up their ISP and ask if there’s a business plan because it’s the same infrastructure. Maybe it’s a slightly better Wi-Fi modem or router, but it essentially comes down to what kind of guarantees the ISPs put on to those sorts of customers,” Bryan said.

Sign up for our Nearshore Americas newsletter:

“Most carriers and ISPs often have a product called dedicated internet access that is a completely symmetrical uncontended port that comes with carrier-grade SLAs, guarantees about latency, jitter availability. That’s in a whole different price class, and I think most people won’t need that kind of connectivity at home,” he added.

In the same way as Maury, Bryan sees network mesh as an option for future investment for Internet providers to guarantee speed and access in a world with increased data traffic needs.

“Most SD-WAN providers, but not all, can utilize something like LTE, eventually maybe 5G, for example, as well. If you have WAN IT infrastructure managers who end up with a lot of distributed workers, they might well be looking toward an SD-WAN provider that can provide them with these small site devices that can handle LTE, or eventually 5G, as a secondary connection, so that the SD-WAN device can really do its work of balancing the traffic loads over say a wireline broadband connection and an LTE broadband connection,” Bryan said.

“That also means there may be some appetite on the mobile providers’ side to offer more, a lot of mobile providers already do this, but more of a broadband solution, where you might even have a fixed wireless solution for residential customers,” he added.

The COVID-19 pandemic seems to have broadband consumption forever. Work-at-home employees, ISPs, and Nearshore companies need to consider what this increased traffic will mean for them in the short and long terms to prepare accordingly.

Diego Pérez-Damasco

Diego Pérez-Damasco is a writer and managing editor at Nearshore Americas. He has more than six years of experience covering politics and business in Latin America. He has been published in media outlets throughout the Americas and holds an MA in International Journalism from the University of Sussex, United Kingdom. Diego is based in Costa Rica.

Add comment