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Half a billion wearables... and guess whose kit has to support all that data, asks Cisco

Smart fridges won't stock themsel... oh. OK then

Analysis Video will continue to be the primary engine of mobile data growth over the next five years, but will be reinforced by an explosion in M2M (machine-to-machine) applications and particularly wearables as a subset of that, given they are more data-intensive.

As a result, total mobile data traffic will reach 292 exabytes (292 x 10^18 bytes) per year by 2019, up from 30 exabytes in 2014, according to the latest Cisco Visual Networking Index (VNI) Global Mobile Data Traffic Forecast for 2014 to 2019.

Video is predicted to represent 72 per cent of global mobile data traffic by 2019, up from 55 per cent in 2014. The number of wearable devices globally will grow five times, reaching 578 million by 2019 from 109 million in 2014, with North America and Asia Pacific accounting for a large proportion of that growth. This in turn is expected to drive an 18-fold growth in mobile traffic from wearable devices between 2014 and 2019, mostly channelled through smartphones as tethering devices.

The other headline trend is a continued rise in dominance of so called smart traffic, that is data generated by more sophisticated software in devices such as smartphones, tablets and laptops, as opposed to texting and data from basic handsets. This already accounted for 88 per cent of global mobile data in 2014 and Cisco predicts this will all but take over completely by 2019 at 97 per cent.

This is being fuelled by the worldwide shift from basic feature phones to smartphones, coupled with the continued growth in tablets and a resurgence in laptops on the back of tablet-like capabilities. The expanding M2M sector is now adding further fuel to the flames of smart data growth. This trend in turn will be supported by a continued increase in speeds supported both by mobile networks and the client devices.

We tend to forget that 2G is still the most prevalent cellular technology, but Cisco predicts that this will be overtaken by 3G some time in 2016. By 2019, 44 per cent of global mobile connections are expected to be 3G, with 4G rising fast at 26 per cent. 4G will have taken the lead in terms of data traffic carried at 68 per cent, on account of its greater capacity than 3G. Average global mobile network speeds will increase 2.4 fold from 1.7 Mbps in 2014 to 4.0 Mbps in 2019.

Beneath these headline findings lay some interesting nuggets, one concerning the emerging battle for mobile data supremacy between 4G and Wi-Fi. To an extent these are complementary with a growth in HetNet (Heterogeneous Network) services anticipated over the next few years (although barely mentioned in the Cisco VNI) combining the two, with fewer locations where one is available, but not the other.

But there will also be a growing number of locations where users, their devices, or the network operator, have a choice between the two. MNOs (Mobile Network Operators) have also already been taking advantage by offloading data to Wi-Fi to exploit the greater capacity and lower cost of the broadband infrastructures serving Wi-Fi hotspots compared with their own backhaul networks.

But now there is another factor with the emergence of mobile voice over IP services, such as Skype apps, that enable users to bypass conventional dial up voice and save money, especially for international calls. Increasingly there is a choice between Voice over Wi-Fi (VoWiFi) and Voice over 4G or LTE (VoLTE), with a swing towards the former.

The Cisco VNI predicts this trend will continue, with VoWiFi traffic at 10.8 PB per year overtaking VoLTE traffic at 10.7 PB per year in 2017 for the first time. Then in 2018, VoWiFi will exceed VoLTE measured by number of minutes used per year, while by 2019, VoWiFi minutes will account for more than half of all mobile IP voice traffic, including 3G.

We are sure Cisco is right on this count, with its survey expressing the same trend by other measures. For example by 2019, the number of Wi-Fi capable tablets and PCs at 1.9 billion will be nearly 3.5 times the number of cellular-capable tablets and PCs at 542 million, about maintaining the current proportion while greatly increasing the absolute gap. Not all analysts agree with this and some anticipate 4G becoming standard in tablets, although the Cisco forecast takes account of the installed base rather than purchases that year.

We anticipate growth in dual Wi-Fi/4G capable tablets in developed markets more especially, driven by more de-mand for virtual or soft SIM services that enable global data roaming. But unless the price premium for inbuilt 3G or 4G capability comes down from its current level of often $100 or more in tablets, then demand will be curtailed and those Cisco numbers will be about right or even over-favour cellular.

Another measure of the balance between cellular and Wi-Fi is the extent of offload from the former to the latter. This can be misleading for trending because operators often do it for short term business or economic reasons that do not always reflect the relative performance or desirability of the networks from the user’s perspective. The Cisco count only includes data from dual mode devices that support both cellular and Wi-Fi connectivity and excludes laptops. Nevertheless the impact of Wi-Fi offload on mobile data has been huge, with Cisco noting that it accounted for 46 per cent of the total in 2014.

Cisco expects this to go on increasing at a much reduced rate, so that by 2019, 54 per cent of all mobile data traffic will be offloaded. One reason for a slowdown in growth of offload is that cellular network capacity will increase as operators deploy fibre closer to cell towers, which will mean that it will not just be a one way process.

In a growing number of cases, data will be routed through the cellular network in preference to Wi-Fi for various reasons, which will include situations where an operator is carrying a zero rated service over its network with a third party, such as a video content provider, paying. In that case the operator would route over cellular in order to recoup the data transit fee.

There will also be some cases where the Wi-Fi network is more congested than the cellular network, especially where the choice is between 4G and, say, a homespot served by a slow broadband connection over a long copper loop some distance from the nearest DSLAM.

The other significant driver of mobile data is the M2M sector, which somewhat confusingly includes wearables, generating large amounts of data, alongside embedded monitoring devices that may produce very little. Cisco is most interested in wearables because of their impact on mobile data, although large numbers of small data transmissions can affect network performance more than the raw bandwidth consumed would suggest. Cisco predicts that the number of wearable devices globally will grow five times to reach 578 million by 2019 from 109 million in 2014.

The survey also looks at growth in mobile cloud traffic, which are services giving users network storage to overcome both the limited memory capacity and processing power of mobile devices. Here the likes of Netflix, YouTube, Pandora, and Spotify are becoming major players and Cisco expects this sector to outperform the whole mobile arena slightly, experiencing nearly 11-fold growth from 2 exabytes a month in 2014 to 21.8 exabytes a month in 2019. As a result, cloud applications will account for 90 per cent of total mobile data traffic by 2019, up from 81 per cent in 2014.

Copyright © 2015, Faultline

Faultline is published by Rethink Research, a London-based publishing and consulting firm. This weekly newsletter is an assessment of the impact of the week's events in the world of digital media. Faultline is where media meets technology. Subscription details here.

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