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2016 Cisco Mobile VNI: Reporting on the Data

Over the last decade, the Cisco Mobile Visual Networking Index (VNI), our rolling five year forecast of Internet trends has delivered some amazing and eye-popping predictions. Today’s VNI Mobile Forecast update, for example, shows that the deployment and adoption of 4G is accelerating even faster than we predicted just a year ago.

In the United States, just like the rest of the world, mobile data consumption continues to climb, driven by insatiable demand for video, video and more video, coupled with a surge in mobile users and devices, and an expansion of mobile networks to serve the Internet of Things – connected cars, homes, health care and more.

For policymakers, the flood of data traffic has created challenges with radio spectrum, forcing nations to find more efficient ways to allocate this scarce resource. And for the industry, it has created challenges forecasting what’s next. So far, we’ve done very well: in each of the last five years, initial projections have been within 10% of the reported 2015 data estimates.

Cisco is committed to being as accurate as possible on the VNI, as well as being transparent. That’s why we go back every year and compare our projections with subsequent mobile data estimates. Based on this year’s comparison, we reset the 2014 U.S. baseline for total mobile data consumption and traffic growth after incorporating data traffic estimates from CTIA, the Wireless Association. CTIA is the most comprehensive source for historic data in the U.S., since they collect data from wireless telecom operators through a voluntary annual survey.

The CTIA data shows fluctuating, positive, growth in U.S. mobile traffic from 2012 to 2014 with larger peaks and lesser peaks, including traffic growth of 26% in 2014. Based on CTIA’s survey data, as well as a close review of traffic samples and direct data sources that are part of our methodology, we reset the 2014 monthly baseline down — from 531 petabytes to 322 petabytes. This revised number may in fact understate the true traffic growth since some mobile operators suggested on their earnings calls that their traffic grew in excess of 50% between 2013 and 2014. But the CTIA survey number is one of the most comprehensive estimates of historical growth, and our 2014 baseline volume adjustment now aligns with CTIA’s figures.

Over the course of 10 years publishing the mobile VNI, we’ve reported out key trends about Internet traffic, connected devices, applications, and shifts in demand. These data are used by network operators and other industry players, including Cisco customers, partners and competitors, as well as government and industry decision-makers. That’s why it’s so important that Cisco be transparent about our methodology and validation efforts.

The adjustment reflected in today’s report does not change the forecast growth curve much at all. The 2015 growth (year-on-year) is forecast at 56%, and the 2015-2020 compound annual growth rate is forecast at 42%. The fundamental trend lines hold. There’s more devices and more video consumed over faster networks, which will continue to transform the world around us.

IoT: Using Technology for the Developing World

As we enter 2016, I can’t help but reflect on the staggering success and take up of the Internet of Things (IoT), which refers to any device able to connect to the Internet. Mobile penetration is booming, broadband access continues to soar, more and more devices are being developed with sensors and wireless capability built in, while the cost of the technology and connectivity continues to plummet.

All of these factors are driving the vast appetite for the IoT, translating into new business models, increased productivity, growing prosperity and new opportunities.

The IoT after all is one of the defining and transformative technologies of our time. Yet, while it is already making huge efficiency and productivity gains in the industrialized world, we cannot overlook the potential for even greater and more significant impact in the developing world.

With over 700 million people or 9.6% of the world’s population living in extreme poverty (below USD $ 1.90 per day) it’s hard not to see the imperative. The ability to impact millions, if not billions, of lives for the better is within our grasp and is an opportunity we can’t afford to miss. This is why Cisco and the ITU have contributed to a discussion and new joint report, Harnessing the Internet of Things for Global Development for the UN Broadband Commission for Sustainable Development.

Simple sensors save lives.

For example, IoT devices are improving sanitation for local communities and increasing efficiency and ensuring greater operating up time by monitoring critical water, sanitation and health equipment. And in Kenya, connected sensors monitor and automatically report faulty refrigerators in medical centers to ensure medicines do not go off and that replacement parts are directed to needy facilities in the shortest possible time – saving lives and resources while reducing cost for those combating life threatening diseases.

So how do we grasp one of the most important technological evolutions of our time for the developing world, and ensure we do not create a new digital divide?

It’s easier than we may think: there is no vast mountain to climb, no great chasm to cross, no global money pot to tap and no great unknown infrastructure to invent and build. The elements required mostly already exist.

The developed world’s demand for IoT technologies and connectivity means that IoT devices are now readily available, affordable and scalable for the developing world: providing the perfect platform to kick start emerging economies and provide much improved quality of life.

IoT R&D costs have been, and continue to be, borne by a hungry developed world market and there is little effort in “tweaking” IoT devices for the developing world. In fact, IoT devices are increasingly common, affordable and easy replaceable making them a de facto new commodity. And, complex new infrastructure is not immediately required or necessary for developing markets as a core infrastructure is readily available and provides a digital backbone to build upon – 95% of the world’s population has 2G coverage and 65% 3G coverage.

Interconnectedness is ultimately the key to increased usage and benefits. Fortunately, interoperability between devices is increasing, making operating and synchronizing a variety of “incompatible” devices possible and practical.

As for scalability, IoT devices are designed to be scalable. Many devices are now simple Plug & Play, making them easy to install and maintain. Reduced and alternate power supplies, like solar, wind and even changes in environmental factors such as moisture, can maintain sensors and networks where there is no consistent electricity supply, making them ideal for locations with irregular or unavailable grid power.

So the elements for a hyper connected IoT environment are here to be built upon – but without the proper foundation they may be unable to take hold and thrive. That’s where forward thinking governments can help. The markets have developed the technology and absorbed initial device costs; it’s now time for government policies supporting private sector initiatives, innovation and investment for the developing world.

In this regard, there are three key elements to achieving global success and delivering on the UN’s Sustainable Development Goals (SDGs) mandate of a world without poverty.

First, we must act now. As was the case with voice telephony and the Internet, we run the risk of creating a new digital divide with IoT. This is avoidable if we move quickly. The elements are in place for us to create an environment where all economies and societies benefit from a truly IoT interconnected world. We cannot take this for granted. Let’s embrace it. I urge leaders in the developing world to seize the opportunity and, working with the private sector, prioritize a digital future for their nations and ensure the IoT takes root and thrives.

Second, invest early. Make necessary spectrum available to connect the wide range of diverse IoT devices. Encourage industry to develop, adopt, and use global standards that will enable interoperable and lower cost devices. Support the investment in the infrastructure necessary for local data centers such as reliable and quality electricity, skilled labor and, where necessary, incentives for investment.   And, support and foster global data flow among data centers to take advantage of scale, reliability and lower costs. By increasing the spectrum available to accommodate the increased traffic and connectivity and encouraging next generation data centers, countries can position themselves to take full advantage, both now and in the future, of the exponential growth in devices and data.

Finally, create, build and maintain trust. Without the belief that data is secure and will benefit all users, citizens, companies and the public sector, adoption and use of IoT will be slowed. Governments can mitigate this risk by engaging early with the private sector to foster the development and implementation of robust security technologies to keep data safe, networks secure and users reassured.

The world has a unique opportunity to raise the quality of life for millions, if not billions of people across the developing world and short circuit a new digital divide. The key is to accelerate the development and deployment of IoT across the developing world.

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Connecting Schools and Students Via Smart Policy

Around the world, over 57 million children of primary school age do not have access to quality education and over 250 million children cannot read or write by the time they reach grade four. In addition, the International Telecommunications Union (ITU) of the United Nations estimates that over 4 billion people have yet to connect to the Internet and the positive economic and social benefits that it enables. With dedicated effort, national policy programs can tackle these twin social challenges simultaneously.

Highlighting a path forward, today Cisco is launching a new report, School Connectivity for the 21st Century, which explores the various national initiatives of five countries that have achieved near universal school Internet connectivity. The report assesses the different government policies and programs that have been successful in extending Internet connectivity to primary and secondary schools in Ireland, New Zealand, Portugal, Uruguay, and the United States. Collectively, the case studies demonstrate that broadband Internet connectivity, as a complement to educational programs, improves outcomes and equips students with the skills necessary to live, work, and thrive in our increasingly digital world.

Most countries around the world have some sort of school connectivity program. Unfortunately, though, connection speeds are often slow and connectivity rarely extends past the front office and into classrooms. While some countries may be connecting schools, they may not be connecting teachers and students to the global learning community.

Effective implementation of public policy not only connects more students to the Internet, but also facilitates real improvements to educational outcomes. The report finds that:

  • Broadband technology is an essential component in the iterative process of enhancing student achievement;
  • Dedicated national school connectivity programs can successfully extend Internet access to the majority of a country’s schools within only four or five years;
  • A range of funding mechanisms can be utilized to support school connectivity, from universal service funds to public-private partnership models; and
  • The amount of connectivity within a school (i.e., the local area networks, LAN) is just as important as the amount of connectivity provided to the school.

Given these findings, we recommend that policy leaders focus on broadband Internet and ICT adoption within schools to accelerate the positive impact of technology on education. The report highlights ‘good practices’ in comprehensive national school connectivity programs. These include: a high level vision; a detailed plan with targets; secure and recurring funding; a comprehensive focus on technology requirements; an emphasis on the development and integration of relevant educational content tailored to the learning environment; concurrent training for educators; and regular monitoring and evaluation of the program.

Process

Several technological aspects of school connectivity programs work in concert to ensure that a
robust system is available for students and educators, namely: bandwidth to the school, within-school connectivity, district-wide access, and complementary hardware and software. The experience of the programs reviewed here demonstrates that, over time, per-student bandwidth needs are regularly updated and
that local area networks (LANs), which provide connectivity within schools, are essential not only to extend connectivity throughout the campus, but also to achieve real outcomes by supporting collaboration and access to resources for every student and educator.

As Horace Mann, a pioneer in education reform in the 19th century, once said, “education, beyond all other devices of human origin, is a great equalizer of the conditions of men – the balance wheel of the social machinery.” Today, nearly two centuries later, let us apply the lessons of history to lingering global challenges by extending educational opportunities – as well as Internet access – to all.

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Statement from Michael Timmeny Congratulating Paul D. Ryan On Becoming Speaker of the House

On behalf of Cisco, let me congratulate Paul D. Ryan on becoming Speaker of the House. Over his tenure on Capitol Hill, Congressman Ryan has a proven track record of taking on important policy issues, and looking for principled, pragmatic, and lasting solutions.

He assumes this new role at a moment when our nation faces big challenges – including the need to reform our system of international taxation, as well as Congressional consideration of the Trans-Pacific Partnership, patent litigation reform and the high skilled immigration reform.

We believe that Speaker Ryan will bring the same energy and principled pragmatism to these challenges. Cisco looks forward to working with Speaker Ryan and other leaders in Congress to move our nation forward.

Let’s celebrate failure in Europe!

That was one of the key themes discussed during today’s “Internet of Everything – What’s in it for Europe event” in Brussels, with MEP Kaja Kallas asking the audience to consider a change in innovation culture to capture the predicted 4.3 trillion that the IoE could generate in value in Europe. Kallas coined the EU attitude to a fear of failure and failing fast compared to the US with “Silicon Valley innovates, DC litigates and Brussels investigates”.

4.3 trillion is a big number, but we think its on the conservative side based on our engagement with public and private sectors around the world. Digital disruption fuelled by the Internet of Everything is redefining industries, cities, countries at an unprecedented rate and promises productivity and economic gains with 1.4% increase in annual GDP and with 1 million new jobs created over ten years.

Michael Hager, Head of Cabinet for Commissioner Oettinger, echoed Kallas’ sentiment on the courageousness required to capture the IoE opportunities, leveraging the Alliance for IoT Innovation (AIOTI) and the Digital Single Market (DSM) to look beyond national borders to a European and international approach. Engaging cross-sectoral collaboration and getting privacy, security and connectivity right will be key enablers.

I was struck by how much in common an enterprise like Bosch, start up AirCloak and the City of Copenhagen had – all touched on the need for vision to breakdown siloed use cases, using concrete demonstrations to illustrate value, to tackle privacy and security issues head-on and the need for education initiatives to accelerate digitisation.

So yes we can celebrate failure in Europe but we can’t afford for the policy environment to be the reason we fail. Fostering the right policy environment means getting it right on issues as diverse as an adaptable data protection framework, a partnership-based security model and the development of an IoE-savvy workforce. The Digital Single Market will bring many elements that will help take us forward, but we need more Member States to complement these efforts by putting digitisation front and centre of their accelerated national digital agendas and municipalities to embrace the opportunities.

Please click here for more information on the opportunity that digitisation fuelled by the Internet of Everything enables.

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