Cogent Communications (CCOI) Morgan Stanley Technology, Media & Telecom Conference 2026 summary

Industry trends and growth drivers

• Internet traffic has grown at a 23% CAGR over 35 years, now at 10% annually, with AI expected to drive the next growth wave after streaming video maturation.

• Streaming video adoption surged from 18% to 54% of video consumption in five years, but future growth will be led by AI integration.

• Internet traffic growth is driven by user numbers, usage time, and bit intensity per minute.

• Each new technology cycle historically re-accelerates traffic growth above long-term trends.

Pricing, competition, and market share

• Price per bit has fallen at 23% annually, keeping the market size flat in dollar terms; price compression is expected to continue.

• Competitive advantage is based on network architecture and cost efficiency, enabling pricing at a 50% discount to market average.

• Market share gains are driven by faster installation, higher reliability, and greater throughput in office markets, with 35% share in 11% of North American office space.

• Wholesale business connects to 1,902 data centers in 57 countries, leveraging a large fiber network.

• Industry consolidation has reduced global carriers from 25 to fewer than 7, with further consolidation expected.

Wavelength Division Multiplexing (WDM) strategy

• WDM business launched after Sprint acquisition, targeting a $2B North American inter-city data center market.

• WDM now 4% of revenues, with 100% YoY growth and 2% market share; aims for 25% share by leveraging more data centers, faster provisioning, unique routes, reliability, and lower price.

• WDM routes are custom priced, and the business is positioned for rapid expansion due to architectural advantages.