This forecast is part of the Cisco Visual Networking Index, an ongoing initiative to track and forecast the impact of visual networking applications. The purpose of this paper is to lay out the details of Cisco's global IP traffic forecast and the methodology behind it. For a more analytical look at the implications of the data presented below, please see the companion article to this paper entitled "Approaching the Zettabyte Era."
June 16, 2008
Executive Summary
In 2012, the total annual volume of IP traffic will reach half a zettabyte. At nearly 44 exabytes per month, the annual run rate of traffic will be 522 exabytes per year. A zettabyte, or 1,000 exabytes, will be the new milestone to look for beyond 2012.
IP traffic will nearly double every two years through 2012. Total IP traffic will increase by a factor of six from 2007 to 2012. Driven by high-definition video and high-speed broadband penetration, consumer IP traffic will bolster the overall IP growth rate so that it sustains a steady growth rate through 2012, growing at a compound annual growth rate (CAGR) of 46 percent.
Last year was a year of phenomenal growth in IP and Internet traffic. Total IP traffic grew 57 percent during 2007, and is estimated to grow by 62 percent in 2008. Internet traffic grew 48 percent in 2007, and is estimated to increase 51 percent in 2008.
Traffic from all applications grew in volume in 2007, but the traffic mix shifted considerably. Peer-to-peer (P2P) file sharing networks are now carrying 600 petabytes per month more than they did this time last year, which means there is the equivalent of an additional 150 million DVDs crossing the network each month, for a total monthly volume of over 500 million DVD equivalents, or two exabytes. Despite this growth, P2P as a percentage of consumer Internet traffic dropped to 51 percent at the end of 2007, down from 60 percent the year before. The decline in traffic-share is due primarily to the increasing share of video traffic. A secondary factor in the decline is the uptake of web-based file in some regions.
Video is now approximately one-quarter of all consumer Internet traffic, not including the amount of video exchanged through P2P file sharing. Internet video grew from 12 percent in 2006 to 22 percent in 2007, and will reach 31 percent by the end of this year.
Internet video will account for nearly 50 percent of all consumer Internet traffic in 2012. Internet video-to-PC will make up the majority of Internet video at 31 percent of total Internet traffic, but Internet video-to-TV will grow rapidly to 18 percent of the total in 2012.
Non-Internet IP video will increase more rapidly than consumer Internet. The twin trends of on-demand viewing and high-definition video are generating very rapid growth in cable video and IPTV traffic transported over IP in the metro. Consumer IPTV and CATV traffic will grow at a 68 percent compound annual growth rate (CAGR) between 2007 and 2012, compared to a CAGR of 41 percent for consumer Internet traffic.
Mobile data traffic will double each year from now through 2012. Mobile broadband-enabled laptops are creating sharp increases in mobile traffic. In some parts of the world, mobile broadband is becoming a substitute for fixed broadband.
Japan's mobile data and Internet traffic was still twice as high as that of the Asia-Pacific region in 2007. However, by 2011, Asia-Pacific will surpass Japan in mobile traffic, as will Western Europe.
Internet traffic is growing fastest in Latin America, followed by Western Europe and Asia-Pacific. The rapidly increasing Internet penetration and the advent of high-speed connections to a greater number of universities and businesses will result in Latin America having the highest growth rate through 2012.
Business IP traffic will grow at a CAGR of 35 percent from 2007 to 2012. Increased broadband penetration in the small business segment and the increased adoption of advanced video communications in the enterprise segment will result in a CAGR of 35 percent for business IP traffic from 2007 to 2012.
Business Internet traffic will grow fastest in developing markets and Asia-Pacific. North America, Western Europe, and Japan will have slower growth rates. In volume, North America will continue to have the most business IP traffic through 2012, followed by Asia-Pacific and Western Europe.
Global IP Traffic Growth 2006-2011
Table 1 shows the top-line forecast. According to this forecast, global IP traffic in 2008 stands at more than 10 exabytes per month, more than quadrupling to approach 44 exabytes per month in 2012. Consumer IP traffic will exceed 32 exabytes per month, business IP traffic will approach 10 exabytes per month, and mobility traffic will exceed 1.2 exabytes per month.
Table 1. Global IP Traffic 2006-2012
Source: Cisco, 2008
Definitions
Consumer: includes fixed IP traffic generated by households, university populations, and Internet cafés
Business: includes fixed IP WAN or Internet traffic, excluding backup traffic, generated by businesses and governments
Mobility: includes mobile data and Internet traffic generated by handsets, notebook cards, WiMAX
Internet: denotes all IP traffic that crosses an Internet backbone
Non-Internet IP: includes corporate IP WAN traffic, IP transport of TV/VoD, and mobile "walled garden" traffic
Generally, this forecast relies on analyst projections for Internet users, broadband connections, video subscribers, mobile connections, and Internet application adoption. Our trusted analyst forecasts come from SNL Kagan, Ovum, Informa, Infonetics, IDC, Frost & Sullivan, Gartner, ABI, AMI, Screendigest, Parks Associates, Yankee Group. Additional splits of the forecast and details of the methodology for each segment and type can be found in the sections that follow.
Consumer IP Traffic 2006-2012
As shown in Table 2, global consumer IP traffic is expected to surpass 32 exabytes per month in 2012. The majority of today's consumer IP traffic is Internet traffic, but consumer IPTV and VoD traffic will grow more rapidly at a CAGR of 68 percent.
Table 2. Global Consumer IP Traffic 2006-2012
Source: Cisco, 2008
Consumer Internet Traffic 2006-2012
This category encompasses any IP traffic that crosses the Internet and is not confined to a single service provider's network. Peer-to-peer (P2P) traffic, still the largest share of Internet traffic today, will decrease as a percentage of overall Internet traffic. Internet video streaming and downloads are beginning to take a larger share of bandwidth, and will grow to nearly 50 percent of all consumer Internet traffic in 2012.
Table 3. Global Consumer Internet Traffic 2006-2012