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2014 Cisco VNI Forecast: It’s not just about big numbers

Today, Cisco released the updated VNI Global IP Traffic and Service Adoption Forecasts, 2013 – 2018 (see media release). The key drivers of global IP traffic growth (network users, devices/connections, broadband speeds, and video consumption) continue to show increases that will create a greater global demand for IP network resources:

  • By 2018, there will be nearly four billion global Internet users (about 52% of the world’s population), up from 2.5 billion in 2013
  • By 2018, there will be 21 billion networked devices and connections globally, up from 12 billion in 2013
  • Globally, the average fixed broadband connection speed will increase 2.6-fold, from 16 Mbps in 2013 to 42 Mbps by 2018
  • Globally, IP video will represent 79% of all traffic by 2018, up from 66% in 2013

As a result of these fundamentals, we are projecting that global IP traffic will grow three-fold from 2013 to 2018 --reaching 1.6 Zettabytes annually by 2018 (a 21% CAGR over the forecast period).

While quantifying the projected growth is important (and helpful to those who are planning for the future), what’s even more interesting are the shifts, transitions and emerging technologies that could significantly impact IP networks in the future. After developing and updating the VNI Forecast for nearly a decade, here are three surprising findings that stand out for us.

Device/Connection Shift: Moving from Basic-Feature Phones and PCs/Laptops to Smartphones, Tablets and M2M

Each year, various new devices in different form factors with increased capabilities and intelligence are introduced and adopted in the market. There’s a clear change taking place in terms of the mix of devices (and multi-device ownership). Globally, many are replacing their basic-feature mobile phones with smartphones and business users and consumers are either replacing their PCs/laptops with tablets (or just adding them to their digital portfolios). And machine-to-machine (M2M) connections are really taking off. The Internet of Everything is becoming a reality. By 2018, there will be 7.3 billion M2M connections — a growing number of M2M applications, such as smart meters, video surveillance, healthcare monitoring, smart cars and asset tracking (et al.) are responsible for this growth. The figure below captures these shifts.

Global-Connected-Devices-By-Type

The effects of these device/connection shifts can also be seen from a traffic perspective. At the end of 2013, 33% of IP traffic and 15% of consumer Internet traffic originated from non-PC devices. By 2018, 57% of IP traffic and 52% of consumer Internet traffic will originate from non-PC devices. Despite the volume of connections (and market buzz), M2M applications won’t have a significant impact on traffic in the near-term. Due to the low-bandwidth nature of many M2M apps, they accounted for less than 1% of global IP traffic 2013 and will represent less than 2.8% of global IP traffic by 2018.

4K TV/Ultra-High Definition (UHD) Video: A Potential “Wildcard” for Video Consumption

The introduction and adoption of UHD or 4K video streaming could have a significant impact on IP video traffic (primarily in advanced video markets with established HD subscriber bases). This is because the bit rate for 4K video is about 18 Mbps, which is more than 2X the HD video bit rate and 9X more than the standard-definition (SD) video bit rate. We estimate that by 2018, 21% of the installed flat-panel TV sets will be UHD, up from 0.4 % in 2013. While consumer cost may prohibit 4K TV adoption for some, many of the barriers that were associated with 3D TV have been removed from this new technology (i.e., special glasses, additional access equipment, limited content, etc.). By 2018, we project that nearly a quarter (22%) of global IP video on demand (VoD) traffic will come from UHD content (see figure below).

HD-Content-Impacts-Global-IP-VOD-Growth

Wireless Supplants Fixed as Top Access Type: Wi-Fi Leads the Way to Wireless Connectivity

Over the past few years, we’ve seen and reported a significant rise in mobile data traffic. The figure below shows the growth of Wi-Fi and mobile (cellular) traffic in relation to traffic from wired devices. By 2018, wired networks will account for 39% of IP traffic, while Wi-Fi and mobile networks will account for 61% of IP traffic. In 2013, wired networks accounted for the majority of IP traffic at 56%, Wi-Fi accounted for 41%, and mobile or cellular networks accounted for 3% of total global IP traffic.  Carriers of all sorts (i.e., mobile, cable, telco) are developing Wi-Fi strategies to reduce the burden on 3G/4G networks (enabling Wi-Fi offloading) and also to extend the reach of their content to subscribers beyond their residential environments (via public hotspots).

Global-IP-Traffic-By-Local-Access-Technology

For more information and insights from the latest VNI study, I invite you to explore the following links:

cisco-vni-interactive-infographic

We hope our work and analysis can play a role in helping you shape your vision and plan for the future.

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2 Comments.


  1. Hi Team,
    Great job gathering all these informations in one view.
    I’d like to hear about your views on :
    -The adoption of video based social applications (eg.Instagram, Youtube…)in Business ?
    -The imapct of theses applications on companies networks ?
    Again, congratulations for the impressive job.
    Gregory

       0 likes

    • Thomas Barnett, Jr.

      Thanks for you comment Greg. We aren’t currently projecting specific metrics for social applications in the business segment. Please see our VNI Service Adoption Forecast (business segment) here: http://www.cisco.com/c/en/us/solutions/collateral/service-provider/vni-service-adoption-forecast/Cisco_VNI_SA_Forecast_WP.html. From 2013 to 2018, the fastest-growing business service is expected to be desktop or personal videoconferencing. The growth of personal videoconferencing, specifically unified communications-based videoconferencing, has recently accelerated due to the higher quality and lower price of new services and products, and also due to the availability of desktop videoconferencing offers, which can stand alone or be integrated. Also, the growth of mobile clients is going to support videoconferencing growth. More and more businesses are using various forms of social media to connect employees and to communicate with customers. We’ll consider doing a more extensive analysis of social media in business next year.

         0 likes