On February 3, Cisco released its annual Visual Network Index (VNI) Forecast Report: Mobile Data Traffic Update, 2014-2019. Although there are several key findings that were made clear by the Vice President of Global Technology Policy Dr. Robert Pepper and the Vice President of Service Provider Marketing Doug Webster, who presented the report, I certainly recommend exploring the global, regional, and national findings on Cisco’s helpful interactive website. (See FSF blog on last year’s report here.)
Video applications are by far the biggest driving force behind the increases in mobile traffic for the past several years and will continue to be for the next five years as connections increase and networks expand. On a global level, video is projected to comprise 72 percent of mobile data in 2019, an increase of 17 percentage points from 2014 (55 percent). While the United States has certainly been a leader in the growth of mobile connections and traffic, the report projects the rest of the world will have tremendous growth over the next five years.
Some key finding regarding the growth of mobile connections and traffic throughout the world:
- Almost half a billion (497 million) mobile devices and connections were added in 2014.
- Mobile network (cellular) connection speeds grew 20 percent in 2014.
- Average smartphone usage grew 45 percent in 2014.
- Global mobile data traffic will increase nearly tenfold between 2014 and 2019.
- By 2019, 4G will be 26 percent of connections, but 68 percent of total traffic.
- The average smartphone will generate 4.0 GB of traffic per month by 2019, a fivefold increase over the 2014 average of 819 MB per month.
As you can see from the two graphs below, the global growth of mobile traffic and devices is projected to be enormous over the next five years.
Cisco Forecasts 24.3 Exabytes per Month of Mobile Data Traffic by 2019
One of the many innovations in broadband technologies and applications is the ability to compress data for high bandwidth applications. This innovative tool expands the consumer base of applications by allowing users to get the same great experience while using less data, ultimately making less advanced networks more useful. Embedded within the methodology of the Cisco report is a 7 percent compression rate over each year of the projection. This speaks volumes to the projected growth in mobile traffic if we also expect applications to get smaller overtime (all else equal).
Global Mobile Devices and Connections Growth
Here are some of the key findings for the United States:
- 40.7 million smartphones were added to the mobile network in 2014.
- Mobile data traffic will grow 7-fold from 2014 to 2019.
- Mobile traffic per user will reach 11,510 megabytes per month by 2019, up from 1,960 megabytes per month in 2014, a compound annual growth rate of 41%.
- There will be 290.1 million (86% of the United States' population) mobile users by 2019, up from 268.5 million in 2014, a compound annual growth rate of 1.6%.
- Mobile data traffic in 2014 was equivalent to 32x the volume of U.S. mobile traffic five years earlier (in 2009).
North America, and predominately the United States, has been a global leader in the development of mobile broadband. North America had 39.1 percent of all global 4G connections in 2014 and that percentage is projected to increase to 42.4 percent by 2019.
The United States’ leadership in the ongoing development of mobile broadband, devices, and content applications is the result of many economic and institutional factors. However, it should not go unnoticed that a light-touch regulatory environment has helped entrepreneurs spur investment in new products and services through the process of “permissionless innovation.” As laptops, tablets, phablets, and smartphones have morphed into each other and become substitutes, competition between them has increased, reducing the price and increasing the quantity demanded by consumers. This increase in consumer demand has created more network development, expansion, and application accessibility.
Additionally, because video currently comprises 55 percent of mobile data, strong intellectual property rights have also played a pivotal role, allowing for a growing number of brands in mobile devices and new video content. It is important for artists, innovators, and service providers to have secure copyrights and patent rights in order to incentivize returns on creation and investment. The prospect of profitable returns invites new entrants into the market, which ultimately leads to more investment and lower prices for consumers.
This report provides very important information for policymakers. It is essential that the FCC not take for granted the way in which the development and deployment of mobile networks and technologies has benefited consumers. As the report recommends, more licensed and unlicensed spectrum is needed to help meet the constantly growing consumer demand for advanced services and devices. Understanding of the extent of mobile data growth and the resulting need for additional spectrum will be crucial for promoting future U.S. leadership in mobile broadband – as will be the need for the government to avoid imposing burdensome regulatory requirements in a market which is indisputably competitive.