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Visual Networking Index

Cisco Visual Networking Index: Global Mobile Data Traffic Forecast Update, 2009-2014

February 9, 2010

The Cisco® Visual Networking Index (VNI) Global Mobile Data Traffic Forecast Update is part of the comprehensive Cisco VNI Forecast, an ongoing initiative to track and forecast the impact of visual networking applications on global networks. This paper presents some of Cisco's key global mobile data traffic projections and growth trends.

Executive Summary

Globally, mobile data traffic will double every year through 2014, increasing 39 times between 2009 and 2014. Mobile data traffic will grow at a compound annual growth rate (CAGR) of 108 percent between 2009 and 2014, reaching 3.6 exabytes per month by 2014.
Almost 66 percent of the world's mobile data traffic will be video by 2014. Mobile video will grow at a CAGR of 131 percent between 2009 and 2014. Mobile video has the highest growth rate of any application category measured within the Cisco VNI Forecast at this time (see Appendix A for applications details).
The Middle East and Africa will have the strongest growth of any region at 133 percent CAGR, followed by Asia Pacific at 119 percent and North America at 117 percent (see Appendix A for region details).

Year in Review: Mobile Data Traffic Growth in 2009

In spite of the economic downturn, which many regions only now are starting to slowly rebound from, the demand for mobile services has remained constant and has in fact grown in many areas. Our global estimates show that mobile data traffic increased 160 percent from calendar year-end 2008 to calendar year-end 2009. And individually, some mobile carriers have published some dramatic traffic increases. For example, the United Kingdom-based O2 reported that its mobile data traffic in Europe doubled every three months in 2009; Telecom Italia announced that its mobile traffic grew 216 percent from mid-2008 to mid-2009; and AT&T has reported that its mobile traffic increased 5000 percent in the past 3 years.

The Impact of Video and Advanced Devices on Mobile Traffic

According to the Cisco VNI Global Mobile Data Traffic Forecast, video will be responsible for the majority of the traffic growth between 2009 and 2014. As Figures 1 and 2 show, overall mobile data traffic is expected to grow to 3.6 exabytes per month by 2014, and over 2.3 of those are due to mobile video traffic.

Figure 1. Cisco Forecasts 3.6 Exabytes per Month of Mobile Data Traffic by 2014

Figure 2. Video Will Account for 66 Percent of Global Mobile Data Traffic by 2014

Figure 3 shows the devices responsible for mobile data traffic growth. Smartphones and portables will account for 91 percent of all mobile data traffic by 2014. This is primarily due to the much higher usage profile of laptops and the suitability of mobile broadband handsets for high-speed, high-quality video.

Figure 3. Laptops and Smartphones Drive Traffic Growth

The average smartphone user generates 10 times the amount of traffic generated by the average non-smartphone user. Handset traffic is highest in regions with the highest smartphone penetration. Currently, Italy has the highest smartphone penetration, and will continue to be the smartphone leader through the forecast period. Starting at a low base, India will experience the highest increase in smartphone penetration, which will triple over the forecast period, and number of smartphone users, which will grow 5.5 fold by 2014.

Table 1. Percentage of Install Base of Smartphones over all Mobile Handsets

Region or Country

2009

2010

2011

2012

2013

2014

Asia Pacific

China

10%

11%

13%

15%

18%

21%

India

4%

5%

6%

8%

10%

12%

Korea

14%

15%

17%

21%

25%

30%

Rest of Asia Pacific

8%

8%

9%

10%

11%

12%

Total Asia Pacific

8%

9%

10%

12%

14%

16%

Central and Eastern Europe (CEE)

Rest of CEE

5%

7%

9%

11%

13%

16%

Russia

6%

7%

9%

11%

15%

17%

Total CEE

6%

7%

9%

11%

14%

16%

Japan

Japan

4%

4%

5%

6%

7%

8%

Total Japan

4%

4%

5%

6%

7%

8%

Latin America

Brazil

1%

1%

1%

2%

2%

2%

Mexico

3%

4%

5%

7%

10%

12%

Rest of Latin America

1%

1%

1%

1%

2%

2%

Total Latin America

1%

1%

2%

2%

3%

3%

Middle East and Africa (MEA)

Rest of MEA

3%

3%

4%

5%

6%

7%

South Africa

1%

2%

2%

3%

4%

4%

Total MEA

3%

3%

4%

5%

6%

7%

North America

Canada

30%

31%

34%

40%

47%

50%

United States

32%

33%

37%

44%

51%

55%

Total North America

32%

33%

37%

44%

51%

54%

Western Europe

France

16%

18%

21%

27%

29%

33%

Germany

17%

19%

22%

25%

29%

33%

Italy

36%

40%

47%

54%

63%

67%

Rest of Western Europe

31%

36%

41%

49%

58%

64%

United Kingdom

17%

18%

20%

23%

29%

32%

Total Western Europe

25%

28%

32%

37%

44%

49%

Global

9%

10%

11%

13%

15%

17%

Source: Cisco VNI Mobile, Informa Media and Telecoms, In-Stat, Gartner, 2009, 2010

The advent of laptops and high-end handsets onto mobile networks is a key driver of traffic, since these devices offer the consumer content and applications not supported by the previous generation of mobile devices. Chief among these new sources of traffic is video, but other applications such as peer-to-peer (P2P) are already making an impact. As shown in Figure 4, a single laptop can generate as much traffic as 1300 basic-feature phones, and a smartphone creates as much traffic as 10 basic-feature phones. iPhones, in particular, can generate as much traffic as 30 basic feature phones.

Figure 4. High-End Handsets and Laptops Can Multiply Traffic

Picoprojectors are a nascent feature addition to smartphones. Although very small in number, this category promises to create higher multiples of traffic due to the high bandwidth required to project images and videos from an advanced mobile device.

Figure 5. Mobile Picoprojector Traffic

Traffic Migration from Mobile to Fixed

Much mobile data activity takes place within the user's home. A survey conducted by Cisco's Internet Business Solutions Group (IBSG) helps quantify the amount of home-based mobile Internet use. As shown in Table 3, the percentage of time spent using mobile Internet at home ranges from 28.2 percent (Mexico) to 48.6 percent (South Africa). The amount of mobile data traffic that is literally "in motion" ranges from 23.7 percent (India) to 45.2 percent (France).

Table 2. Mobile Internet Time at Home, at Work and On The Move

 

Percentage of Mobile Internet Time at Home

Percentage of Mobile Internet Time at Work

Percentage of Mobile Internet Time On the Go

United States

37.8%

19.6%

42.6%

United Kingdom

45.6%

17.8%

36.6%

Germany

43.4%

15.3%

41.3%

France

33.1%

21.7%

45.2%

Italy

39.6%

21.4%

39.0%

South Africa

48.6%

21.4%

30.0%

Mexico

28.2%

27.6%

44.2%

Brazil

36.7%

24.7%

38.6%

Korea

33.7%

31.7%

34.6%

India

45.9%

30.4%

23.7%

China

30.1%

32.7%

37.2%

Source: Cisco IBSG Connected Life Market Watch, 2009

The relatively high percentage of home-based mobile data use suggests that operators may be able to offload traffic onto a fixed network, either by offering their subscribers dual-mode mobile phones or through deployment of femtocell technology.
Cisco has estimated the amount of smartphone traffic that can be offloaded through dual-mode devices or femtocells (see Table 3). The offload factor for each country is a combination of smartphone penetration, dual-mode share of smartphones, percentage of home-based mobile Internet use, percentage of dual-mode smartphone owners with Wi-Fi fixed Internet access at home.

Table 3. Dual-Mode and Femtocell Traffic Offload as a Percentage of Smartphone Traffic

 

2009

2010

2011

2012

2013

2014

China

15%

15%

15%

16%

16%

17%

India

22%

23%

20%

16%

12%

8%

Korea

20%

22%

22%

23%

24%

25%

Rest of APAC

22%

23%

25%

26%

27%

29%

Rest of CEE

26%

26%

26%

26%

27%

27%

Russia

26%

27%

29%

30%

31%

32%

Japan

24%

25%

25%

24%

24%

23%

Brazil

18%

18%

19%

19%

19%

18%

Mexico

14%

12%

10%

9%

9%

8%

Rest of LATAM

16%

16%

15%

14%

14%

13%

Rest of MEA

20%

21%

19%

19%

19%

19%

South Africa

23%

24%

23%

22%

22%

22%

Canada

13%

16%

18%

21%

23%

24%

US

13%

16%

18%

20%

22%

23%

France

23%

24%

24%

26%

27%

28%

Germany

30%

31%

32%

33%

32%

31%

Italy

25%

23%

22%

22%

21%

21%

Rest of WE

27%

28%

29%

30%

29%

28%

UK

31%

32%

34%

35%

35%

35%

Source: Cisco VNI Mobile, 2010

In many developing countries and regions, the offload percentage declines, while in developed regions, the offload factor steadily rises throughout the forecast period. The declining offload factor in developing markets is due to a decreasing number of mobile data users with Wi-Fi at home.
Since dual-mode devices are primarily smartphones, the overall offload amount in the current year is much smaller than shown above, since non-smartphones still account for approximately half of handset traffic.

Traffic Migration from Fixed to Mobile

While a significant amount of traffic will migrate from mobile to fixed networks, a much greater amount of traffic will migrate from fixed to mobile networks.
In many countries in Europe, mobile operators are offering mobile broadband services at prices and speeds comparable to fixed broadband. Though there are often data caps on mobile broadband services that are lower than those of fixed broadband, some consumers are opting to forgo their fixed lines in favor of mobile. Mobile broadband substitution has a familiar ring to it from the mobile voice substitution effect that began in the late 1990s and is continuing today.
Below are Cisco's estimates for the number of mobile-only data users for each country covered by the forecast. The adoption rates for mobile-only data users were estimated by analogy, using each country's historical mobile-only voice adoption curves as a guideline. Tables 4 and 5 show the status of mobile-only voice adoption and Cisco's estimates for mobile-only data adoption, worldwide.

Table 4. Mobile-Only Voice Access by Country, 2009

 

Individuals with Mobile-Only Voice Access

% of Population with Mobile-Only Voice Access

% of Households with Mobile-Only Voice Access

India

285 million

24%

11%

U.S.

78 million

25%

18%

Brazil

67 million

35%

23%

China

47 million

4%

2%

Japan

40 million

31%

20%

Russia

37 million

26%

14%

Mexico

29 million

26%

16%

South Africa

24 million

48%

28%

Italy

23 million

39%

26%

UK

11 million

18%

13%

Germany

10 million

12%

10%

France

9 million

14%

11%

Korea

9 million

18%

12%

Source: Cisco VNI Mobile, ITU, Informa Telecoms and Media, 2009-2010

Table 5. Mobile-Only Data Users by Country, 2009-2014

 

2009

2010

2011

2012

2013

2014

India

163,689

828,683

3,888,314

17,256,707

73,829,086

308,851,560

China

190,146

518,583

1,383,970

3,642,164

9,443,822

24,300,965

Korea

376,500

602,666

957,999

1,516,525

2,393,976

3,771,869

Japan

111,394

359,198

1,150,448

3,670,717

11,683,890

22,854,370

Brazil

827,558

3,040,933

10,931,351

38,697,116

60,403,090

78,730,025

Mexico

971,776

3,948,432

15,768,396

25,198,155

30,515,904

34,612,380

Italy

3,916,047

6,857,703

11,931,072

20,667,916

22,410,783

24,974,231

UK

600,749

1,552,295

3,985,042

7,133,489

8,947,340

11,918,730

Germany

25,647

52,075

105,116

211,393

424,078

6,570,142

France

54,576

168,444

515,510

1,569,244

4,759,895

6,844,943

U.S.

1,385,555

2,870,536

5,895,539

12,037,664

24,481,704

57,908,159

South Africa

2,088,276

4,713,732

10,554,417

16,657,697

20,701,824

24,924,337

Russia

2,137,895

4,165,446

7,995,997

15,187,490

28,634,331

29,505,517

Source: Cisco VNI Mobile, 2010

Beyond the Substitution Effect: New Behaviors

Mobile devices increase an individual's contact time with the network, and it is likely that in the early stages of mobile Internet, this increased contact time will lead to an increase in overall minutes of use per user. However, not all of the increase in mobile data minutes-of-use can be attributed to the amplified use of the same applications that dominate the fixed network. Some uniquely mobile applications are already emerging.
A lot of excitement has been building around a category of iPhone and Android applications in a new category called "augmented reality" applications or "social augmented reality" mobile location-based services.
These applications combine virtual data into the physical real world by utilizing the iPhone 3GS or an Android phone's compass, camera, and GPS. The result is that users can view the location of a tweet (Twitter) and local restaurants in the physical world, even if they are miles away. An example is the Sekai Camera iPhone application in Japan-users can leave text messages, photos, and audio recordings that appear as floating bubbles in the location they are created. Other users can point their Sekai Camera at the location to see what kind of content has been posted there.

Regional Trends

Western Europe and Asia Pacific will account for over 56 percent of global mobile, as shown in Figure 6. The emerging market regions (Central and Eastern Europe, Latin America, and Middle East and Africa) will have the highest growth and will represent an increasing share of total mobile data traffic, from 9 percent at the end of 2009 to 14 percent by 2014.

Figure 6. Global Mobile Data Traffic Forecast by Region

Each region's mobile data traffic is strongly correlated with the average mobile speed available in that region. Below are smartphone speed test results from Cisco's Global Internet Speed Test (GiST) application.

Table 6. Average Smartphone Mobile Speed by Region

Average Smartphone Mobile Speed by Region

Region

kbps

Asia Pacific

280

Japan

690

Western Europe

691

North America

418

Latin America

321

Middle East and Africa

106

Central Europe

263

Source: Cisco GiST, January 2010 (learn more at www.ciscovnipulse.com)

Emergence of Prosumers: Comparison of Consumer and Business Mobile Traffic

Consumer and business mobile IP traffic is on the rise with increased smartphone and portables adoption. Consumer mobile data traffic is growing and will continue to gain higher momentum due to the emergence and growth of the prosumers as well the adoption of Smartphones with advanced music and video capabilities. In 2009, consumers represent 67% of the total mobile data traffic while business mobile users contributed is 33% of total mobile data traffic. By 2014, consumer mobile Internet traffic will account for 73% of all mobile data traffic.

Figure 7. Global Business and Consumer Mobile Data Traffic Forecast, 2009-2014

One of the key contributors to the growth of business mobile data traffic is enterprise mobile applications. Examples include fleet tracking of vehicles, assets and personnel, real time location of multiple devices and automated location based alerts. Initially assumed to be text and map image based, this category will evolve in volume of traffic as well as develop into multimedia grade mobile traffic.

Figure 8. Enterprise Mobile Applications on the Rise, 2009-2014

Long-Term Outlook: Device Diversification and Ubiquitous Mobility

Mobile voice service is already considered a necessity by many, and mobile data, video, and TV services are now becoming an essential part of consumers' lives. Mobile subscribers are growing rapidly and bandwidth demand due to data and video is increasing. Mobile machine-to-machine (M2M) connections continue to increase. The next five years are projected to provide unabated mobile video adoption despite the recent economic downturn. Operators are rolling out increased bandwidth through Enhanced Data rates for GSM Evolution (EDGE), Evolution-Data Optimized (EV-DO), High-Speed Downlink Packet Access (HSDPA), and related upgrades. There is a need for backhaul capacity to increase in order for mobile broadband, data access, and video services to engage the end consumer as well as keep costs in check.
Deploying next-generation mobile networks requires greater service portability and interoperability. With the proliferation of mobile and portable digital devices, there is an imminent need for the network to allow for all these devices to be connected seamlessly. This openness will broaden the range of applications and services that can be shared, creating a highly enriched mobile broadband experience. The expansion of wireless ubiquity will lead to an increase of consumers who access and rely on mobile networks, creating a need for greater economies of scale and lower per-bit cost.
A win-win situation needs to be formed for the service providers and the over-the-top providers. New partnerships, ecosystems and strategic consolidations are expected as mobile operators, content providers, application developers (et al.) seek to monetize the video traffic that traverses mobile networks. Operators must solve the challenge of effectively monetizing video traffic while investing and increasing infrastructure capital expenditures. It is imperative to become more agile and disruptive by changing course in a short amount of time and provide innovative services to engage the Web 3.0 consumer. As the net neutrality regulatory process and business models of the operators evolve, there is an unmet demand for highest quality and speeds by consumers. With wireless technologies aiming to provide wired experiences, the next few years will be critical for operators and service providers to plan their future network deployments.

For More Information

Inquiries can be directed to traffic-inquiries@cisco.com.

Appendix A: The Cisco VNI Global Mobile Data Traffic Forecast

Table 7 shows a detailed breakout of the Cisco Global Mobile Data Traffic Forecast.

Table 7. Global Mobile Data Traffic 2009-2014

Mobile Data Traffic 2009-2014

 

2009

2010

2011

2012

2013

2014

CAGR
2009-2014

By Application Category (TB per month)

Video

35,897

113,094

298,981

652,846

1,322,219

2,336,732

131%

P2P

15,496

23,783

50,740

104,969

177,250

276,952

78%

Gaming

4,615

11,716

27,038

62,199

110,981

173,177

106%

VoIP

4,579

11,245

24,918

55,821

100,028

156,829

103%

Web/Data/Other

30,242

60,251

133,827

273,782

451,264

621,610

83%

By Device Type (TB per month)

Non-Smartphones

7,179

15,678

33,965

63,938

103,350

142,612

82%

Smartphones

9,390

27,446

78,199

192,392

407,870

748,713

140%

Portables, Netbooks, Tablets

69,857

166,229

397,056

836,510

1,543,097

2,495,710

104%

Broadband Gateways

4,402

10,735

26,283

56,776

107,425

178,265

110%

By Geography (TB per month)

North America

16,022

40,607

103,141

230,738

451,395

773,361

117%

Western Europe

29,236

69,962

168,084

356,244

661,233

1,076,290

106%

Asia Pacific

18,432

47,301

121,513

274,652

542,383

937,299

119%

Japan

18,159

39,425

84,792

158,127

252,393

342,132

80%

Latin America

4,267

10,494

25,908

56,424

107,612

179,976

111%

Central Eastern Europe

2,905

7,251

18,157

40,083

77,446

131,151

114%

Middle East and Africa

1,807

5,047

13,907

33,349

69,278

125,092

133%

Outer Space

0.0006

0.0064

0.0425

0.0923

0.1634

0.2934

284%

By Application (TB per month)

Content Uploads

73

155

326

589

899

1,140

73%

Email

1,710

3,430

6,612

10,471

12,690

9,382

41%

Games Downloads

164

345

711

1,252

1,837

2,177

68%

Instant Messaging (IM)

0.02

0.04

0.09

0.18

0.32

0.48

94%

Enterprise Applications

274

733

1,948

4,535

9,193

16,258

126%

Mobile Internet

523

1,147

2,500

4,743

7,744

10,836

83%

Music Downloads

291

690

1,646

3,461

6,372

10,283

104%

Music Streaming

4,196

10,118

24,499

52,336

97,927

160,707

107%

Gaming

26

61

141

289

516

806

98%

Picoprojector

-

87

422

1,360

3,410

7,031

-

Picture Downloads

125

265

554

997

1,513

1,896

72%

Text Messaging

7

14

27

41

49

32

36%

Social Networking

810

1,960

4,760

10,201

19,148

31,524

108%

Application Downloads

14

33

79

168

313

511

106%

Tethering

599

3,313

12,592

36,758

87,406

174,317

211%

Video Downloads

37

85

199

410

737

1,158

99%

Video Messages

23

50

110

210

346

490

85%

Video Messages and Calling

5

11

23

44

73

103

84%

Video Streaming

7,694

16,143

34,767

73,590

147,818

293,690

107%

PC-Based Web/Email/Files

19,861

41,240

88,904

179,972

311,104

469,321

88%

PC-Based P2P

10,406

24,192

51,779

106,569

198,601

310,350

97%

PC-Based Internet Gaming

4,424

11,511

26,739

61,606

120,456

198,110

114%

PC-Based Internet Voice

4,851

11,438

25,428

56,672

111,586

183,882

107%

PC-Based Internet Video

31,218

87,094

237,400

502,402

913,143

1,424,220

115%

PC-Based Internet video communications

3,499

9,758

24,297

58,459

120,577

205,410

126%

Total (TB per month)

Total Mobile Data Traffic

90,829

220,088

535,503

1,149,617

2,161,741

3,565,300

108%

Source: Cisco VNI Mobile, 2010

Definitions

Portables: This category includes laptops with mobile data cards, USB modems, and other portable devices with embedded cellular connectivity.

Appendix B: The Cisco VNI Global Mobile Data Traffic Forecast Methodology

The Cisco VNI Global Mobile Data Forecast relies in part upon data published by Informa Telecoms and Media, Infonetics, Cahners In-Stat, Datamonitor, Gartner, IDC, Dell'Oro, Synergy, Nielsen, comScore, and the International Telecommunications Union (ITU).
With the February 2010 update, the Cisco VNI methodology for the mobile data traffic forecast has been significantly expanded and enhanced. In general, the forecast methodology still begins with the number and growth of connections and devices, applies adoption rates for applications, and then multiplies the application's user base by Cisco's estimated minutes of use and kilobytes per minute for that application. Within that general outline, the methodology has evolved to link assumptions more closely with fundamental drivers, to use data sources unique to Cisco, and to provide a high degree of application, segment, geographic, and device granularity.

1. Inclusion of fundamental drivers. As with the fixed IP traffic forecast, each Cisco VNI Global Mobile Data Forecast update increases the linkages between the key assumptions and fundamental drivers such as available connection speed, pricing of connections and devices, computational processing power, screen size and resolution, and even device battery life. This update focuses on the relationship of mobile connection speeds and the kilobyte-per-minute assumptions in the forecast model. Proprietary data from the Cisco Global Internet Speed Test (GIST) application was used as a baseline for current-year smartphone connection speeds for each country.

2. Device-centric approach. As the number and variety of devices on the mobile network continue to increase, it becomes essential to model traffic at the device level rather than the connection level. This Cisco VNI Global Mobile Data Forecast update details traffic to smartphones, non-smartphones, laptops/tablets/netbooks, e-readers, digital still cameras, digital video cameras, digital photo frames, in-car entertainment systems, and handheld gaming consoles.

3. Estimation of the impact of traffic offload. The Cisco VNI Global Mobile Data Forecast model now quantifies the impact of dual-mode devices and femtocells on handset traffic. Proprietary data from Cisco's IBSG Connected Life Market Watch was used to model offload effects.

4. Increased application-level granularity. The forecast now offers a deeper and wider range of application granularity. The Cisco VNI Global Mobile Data Forecast, 2009-2014 white paper includes data on 20 separate applications, compared to the 9 application groups that were published in the previous version of the forecast.

5. Business and consumer split. Like the fixed IP traffic forecast, the Cisco VNI Global Mobile Data Forecast now separates business mobile data traffic from consumer mobile data traffic.

6. Bottoms-up forecasting from the country level. While country-level detail was included in last year's Cisco VNI Global Mobile Data Forecast, individual country forecasts were estimates based on the overall forecast of that region. This year's forecasting process started with individual country forecasts, which were subsequently aggregated into regional summaries.

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