Video Data Is the Leading Contributor to Rapid Traffic Growth

On November 26, 2018, Cisco released its Visual Network Index (VNI): Forecast and Trends, 2017-2022. This annual report is useful to policymakers, entrepreneurs, and consumers because it projects growth of broadband devices and network technologies at the national, continental, and global level. Given the projections, the report should be particularly useful in getting policymakers to focus on the need to remove regulatory and other impediments to deploying broadband infrastructure. Cisco deserves credit for producing this valuable resource.

According to Cisco, the significant rise in Internet traffic experienced over the past decade or so is expected to continue for the next five years as connections increase and networks expand. The proliferation of video applications is by far the most significant driving force behind exponentially increasing Internet traffic. On a global level, video traffic comprised 75% of Internet data in 2017 and it will increase to 82% by 2022. In the United States, video traffic comprised 81% of all Internet traffic in 2017 and it will increase to 82% by 2022.

As the graph below shows, global Internet traffic will grow threefold from 2017 to 2022, at the same rate as Internet traffic growth in the United States.

Global Internet Traffic: Cisco Forecasts 396 Exabytes per Month by 2022

Overall, the amount of Internet traffic and the number of users and devices throughout the world is astounding. By 2022, there will be 4.8 billion Internet users (60% of the global population), up from 3.4 billion in 2017. And those users will connect to 28.5 billion networked devices, up from 18 billion in 2017. In the United States by 2022, there will be 317 million Internet users (94% of the population) connecting to 4.6 billion networked devices. That means there will be 13.6 networked devices per capita by 2022, up from 8.1 per capita in 2017.

The graph below shows the extraordinary global growth projected across all Internet-enabled devices.

Global Devices and Connections Growth, 2017 - 2022

While overall Internet traffic and devices are growing at a phenomenal rate, mobile traffic is growing twice as fast as fixed traffic. The United States has been a leader in the growth of mobile traffic, which is expected to increase fivefold from 2017 to 2022. Over that same span, global mobile traffic is expected to grow even faster than the U.S. mobile traffic.

Here are some key findings regarding the growth of mobile broadband throughout the world:

• Average smartphone usage will grow from 5.1 GB per month in 2017 to 26.1 GB per month in 2022.

• Global mobile traffic will increase sevenfold between 2017 and 2022.

• Global mobile traffic will grow nearly twice as fast as fixed Internet traffic from 2017 to 2022.

• Video will comprise 79% of global mobile traffic by 2022, compared to just 59% in 2017.

• Global mobile traffic by 2022 will be equivalent to 38x the volume of the entire global Internet in 2005.

Here are some of the key findings regarding the growth of mobile broadband in the United States:

• The average mobile connection speed will grow threefold from 2017 to 2022, reaching 39 Mbps.

• U.S. mobile traffic will reach 5.7 exabytes per month by 2022, up from 1.2 exabytes per month in 2017.

• U.S. mobile traffic will grow fivefold from 2017 to 2022, a compound annual growth rate of 36%.

• U.S. mobile traffic will grow two times faster than fixed IP traffic from 2017 to 2022.

• U.S. mobile traffic by 2022 will be equivalent to 12x the volume of the entire U.S. Internet in 2005.

The United States has been a global leader in mobile device innovation and the deployment of mobile broadband networks. Advanced 4G networks offer exponentially superior reliability, capacity, speeds, and security for mobile traffic compared to previous mobile network technologies. Now, we are on the cusp of deploying 5G mobile network technology, which will deliver speeds at least 10 times faster than 4G and enable “smart cities” to more efficiently use local services such as energy, utilities, transportation, and public safety. Deployment of 5G technology is expected to create 3 million jobs and $500 billion in annual economic activity.

Since my February 2017 blog regarding Cisco’s most recent mobile traffic update, the FCC has adopted a number of items that should spur innovation and investment in U.S. broadband networks, both mobile and fixed. Adoption of the Restoring Internet Freedom Order, proposed in May 2017, repealed the public utility-style regulations imposed in the Title II Order. Internet service providers increased broadband investment in 2017 after a two-year decline. Moreover, the FCC has adopted a number of wireless and wireline infrastructure items that remove state and local regulatory barriers. These should accelerate 5G wireless deployment. (See here and here.) Lastly, the Commission has identified a number of spectrum bands for commercial assignment and allocation, which will be tremendously valuable as consumers continue to demand more mobile data. (See here and here.)

Again, Cisco’s report is an important tool. It should help U.S. policymakers understand that mobile and fixed data services require additional spectrum to match the forecasted growth and to make the social and economic benefits of 5G a reality. To promote 5G and the emergence of other broadband technologies, policymakers at the federal, state, and local levels must avoid imposing unnecessary new regulatory burdens and continue to remove existing ones. Also, Congress and the FCC should continue to remove, or at least minimize, impediments to infrastructure investments in order to ensure continued innovation and growth in the dynamically competitive market for broadband services.