On February 5,
Cisco released its Global Data Traffic Forecast Update, 2013
- 2018. These reports,
undertaken by Cisco annually, have proven to be valuable tools for
understanding and forecasting shifts in data traffic.
This year’s
report shows impressive growth in the adoption, usage, and number of mobile
devices worldwide. But each of these metrics varied dramatically by region. North
America led the world in nearly all categories of growth, including traffic,
data usage, and “smart” device adoption.
While such
leadership is evidence of a strong digital economy, it also highlights the
growing demand for spectrum. And this continually growing spectrum demand emphasizes
the importance of sound spectrum policy decisions by the FCC to ensure positive
trends like those reported by Cisco continue.
According to
Cisco, global mobile data traffic increased by 81 percent in 2013, rebounding
from a slowed rate of growth in 2012. In 2013, global mobile data traffic reached
1.5 exabytes per month, increasing from 820 petabytes per month at the end of
2012. This traffic is nearly 18 times the traffic of the entire global Internet
in 2000. Emerging market regions like the Middle east and Africa all doubled
mobile data traffic in 2013. Mobile data traffic in more mature markets like
North America and the Asia Pacific region grew by 77 and 86 percent
respectively.
Cisco projects
that global mobile data traffic will grow nearly 11-fold between 2013 and 2018,
increasing to 15.9 exabytes per month by 2018, as the chart from Cisco’s report
shows below.
In North
America, consumers utilize more data than the rest of the world, averaging 1.38
GB per month in 2013, compared to just 185 MB in the Middle East and Africa.
This trend is only expected to continue, as North America is a region that is
projected to have the fastest growth in connections to mobile devices that
access mobile networks. The North America and the Asia Pacific regions will
account for nearly two-thirds of global mobile traffic by 2018.
The report finds
that the increasing number of wireless devices is one of the primary
contributors to global data growth. Cisco projects that by the end of 2014
there will be more mobile-connected devices than people in the world. Consumers
added over half a billion mobile devices and connections in 2013, making the
global device and connection total 7 billion in 2013. As noted above, North
America leads growth in this metric too, with the region projected to increase
in mobile device connections at a 12 percent compounded annual growth rate.
Globally, mobile
devices and connections are projected to grow to 10.2 billion by 2018. This
will be comprised of approximately 8.2 billion personal mobile devices, and 2
billion machine-to-machine (M2M) connections. Over half of all devices
connected to the mobile network will be “smart” by 2018, as the chart below
shows. “Smart” devices have advanced computing and multimedia capabilities and
a minimum of 3G connectivity. Again, North America is projected to lead growth
in this area, with its regional share of smart devices and connections
increasing from 65 to over 90 percent between 2013 and 2018. Western and Central Europe fall second
and third, with projected regional share of smart devices reaching 83 and 61
percent of total devices, respectively.
Cisco reports
that the transition to smart devices is accompanied by an evolution to
higher-generation connectivity. This fuels rapid production and adoption of
advanced multimedia applications, and contributes to increased mobile and Wi-Fi
traffic. By 2018, mobile video is projected to generate over 69 percent of
mobile traffic by 2018, contributing to the 90 percent of total mobile data
traffic accounted for by all cloud applications which include streaming audio,
online gaming, social networking, web browsing and online storage.
In turn, the
need for efficient bandwidth and network management drives 4G deployment and
adoption worldwide. Japan and Korea are predicted to lead 4G deployment; Cisco
estimates that 56 percent of Japan’s connections will be 4G by 2018, and 54
percent of Korea’s. North America is projected to have 51 percent of its mobile
devices and connections with 4G capability by 2018, but it is expected to lead
the world in its share of total global 4G connections.
Additionally,
the marked growth of machine-to-machine (M2M) connections and wearable devices
will also continue to drive mobile data traffic growth. Over the next five
years, Cisco projects M2M and wearable connections will grow from 341 million
to over 2 billion, and those will transition from predominantly 2G (71 percent)
today toward 3G (51 percent) and 4G (14 percent) by 2018, as the chart below
shows. For wearables, Cisco estimates that the number of devices will grow
8-fold by 2018, increasing from 22 to 177 million. Traffic from these devices
is projected to grow an amazing 36-fold between 2013 and 2018, reaching 61
petabytes a month. Again, North America currently leads the world in this
category, with 42 percent of the global share of wearables. North America is
also slated to lead growth in this area, despite experiencing a decrease in
relative share over the next five years as other regions adopt wearable device
technology.
The global
growth in mobile connections, devices, and traffic, and the evolution and
emergence of new technologies over the past year exemplify the strength and
vitality of the digital economy worldwide. Cisco’s valuable work tracking these
metrics provides a crucial resource that informs the decisions of carriers,
vendors, innovators, investors, and policymakers alike.
Clearly, Cisco’s
latest report shows that North America leads the world in many growth
categories. Although it is important to acknowledge this progress, it is
imperative that policy-makers consider the implications of these findings. The
report provides evidence of the exponential growth in data traffic, devices,
applications, adoption of smart devices, and the accompanying demand for more
spectrum. The North American region has by far the highest data use per month
in the world, and the fastest growing number of devices with advanced computing
and multimedia capabilities. Given Cisco’s projections, making more licensed
and unlicensed spectrum available will be increasingly necessary.
The FCC has an
important role to play in ensuring the continued growth and development of the
mobile market. It is essential that the Commission not take for granted the way
in which this progress has benefited consumers and fueled the development and
deployment of new networks and technologies. Making more spectrum available for
licensed and Wi-Fi offerings will help meet the constantly growing consumer
demand for advanced services and devices demonstrated throughout Cisco’s report.
Successfully
executing the upcoming incentive auction and framing forward-thinking broadband
policy that reflects the robust and rapidly changing digital economy will be
challenging. But approaching these proceedings with an understanding of the
extent of mobile data growth and the resulting need for additional spectrum will
be crucial to promoting future U.S. leadership in mobile broadband.
Cisco’s report
is a valuable resource for all, and especially for communications policymakers.