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Cisco: Mobile Growth Going Down, Down, Down
Written by Dave Burstein   
Thursday, 07 February 2013 00:09

2012 U.S. predicted 259 PB/month, actual 222 PB/month. World predicted 1,252, actual 884. The 100% growth rates for mobile data are disappearing, as predicted since 2009 by most experts and ignored by JG and other policy people. 86% in 2012 and a predicted 70% in 2013 remains high growth. There's an even lower number using some revised Cisco data - 62% instead of 86% - that I need to check out. The latter is closer to the CTIA data reported by Tim Farrar. Of course, even the 42% Cisco predicts for 2017 will require first rate engineering to serve, but the “crisis” was an invention of D.C.

   There is a hump in demand as people get smartphones and 3G/4G. That began early in the U.S. with the iPhone but is running its natural course. More than half the U.S. has smartphones so that growth is tailing off. Craig Moffett notes the same phenomena on the financial side. Smartphones have lifted revenue but the effect is playing out.

    As carriers start metering data, people learn not to watch video on their phones outside of WiFi range. Glen Campbell of Merrill Lynch predicted back in 2009 that pricing would cut demand and that’s kicked in with a vengeance. Cisco sees 46% of smartphone traffic offloading to WiFi by 2017. (Also predicted by Campbell in 2009.)

    3G/4G and smartphones are still early in their ubiquity in most of Asia, Africa and Latin America, so growth the next few years should be strong. There too Cisco sees a precipitous fall in growth rates after 2014. My opinion is that Africa and India in particular have enormous mobile Internet growth coming in the next few years. Few outside the continent realize that Africa in a few years will have more Internet users than the U.S. So will India.  Benedict Evans just tweeted that Vodafone India has 33.1m active mobile data users. 2.5m on 3G. With few copper lines, this will almost all be wireless. Kenya and Rwanda are more forward thinking than the U.S. on regulation for high capacity on wireless networks because they have no choice. 

The U.S. mobile data growth estimates are

2013 70%

2014 66%

2015 57%

2016 48%

2017 42%

The world growth estimates

2013 78%

2014 80%

2015 68%

2016 58%

2017 50%

  Arielle Sumits of Cisco explains “In the US, last year we estimated US smartphone traffic would be 93 PB/mo in 2012 and this year we estimate it was actually 99 PB/mo, so the deceleration is not in smartphones. Rather, it is in laptop-generated traffic, which last year we estimated would be 92 PB/mo in 2012 and this year we estimate was actually 84 PB/mo. Tablet growth was also slightly lower than expected for the US, since many tablets are Wi-Fi only and the offload rate for tablets is very high – so for tablets last year we estimated traffic would be 17 PB/mo in 2012 and now we estimate it was 14 PB/mo in 2012.”

. Cisco’s VNI data is the best available measure of traffic growth, informed by Cisco’s relationships with all the major carriers. There’s much more http://bit.ly/X6Jg9f Thanks to Kevin Petschow for working with me to confirm the data on a tight deadline and also to hard-working analyst Tim Farrar who has more of the story at http://tmfassociates.com/blog/