Cisco Visual Networking Index Update: Continued exponential growth forecast for mobile data and video!

Global mobile data traffic will grow 26 times between 2010 and 2015, to 6.3 exabytes–a billion gigabytes–per month, according to the latest update report from Cisco’s Visual Networking Index Global Mobile Data Traffic Forecast. Additionally, fully two-thirds of all mobile data traffic will be video by 2015, the report predicted. The figures again underscore the challenges operators face as they try to manage the tidal wave of mobile data that may saturated their wireless networks.  According to the report, mobile data traffic grew 159 percent in 2010, roughly 3.3 times faster than fixed Internet traffic.  That was higher than the 149 percent growth rate Cisco had predicted.

This annual forecast is seen as a key benchmark for measuring and predicting data traffic., Doug Webster, Cisco’s senior director of worldwide service provider marketing, said four main factors will drive mobile data traffic in 2015. First, there will simply be more mobile devices; Cisco predicts that by 2015 there will be 5.6 billion mobile devices and 1.5 billion separate machine-to-machine nodes–roughly one mobile connection for every person in the world. Additionally, he said, devices will have better computing capabilities and the ability to access high-bandwidth content; average bandwidth speeds are expected to increase 10-fold by 2015; and more people will consume rich content like video.  “The lines between fixed and mobile will converge, and the trends we’re seeing on the fixed will be seen on mobile,” Webster told FierceWireless.

Thomas Barnett, the senior manager for service provider marketing at Cisco, said carriers are investing billions of dollars in research and development to try to get ahead of the traffic. Barnett said carriers likely will rely on tiered pricing models and femtocells as methods to slow data use and offload it from the wireless network.

AT&T Mobility became the first U.S. carrier to move to usage-based pricing last year, and Verizon Wireless has indicated it may follow in the not-too-distant future. “This is business for the providers,” Webster said. “They want to have more subscribers. They’re not trying to minimize the amount of traffic, but they want to make sure they are compensated appropriately for the cost of delivering it.”

But tiered pricing and metered data transfers won’t be enough to prevent wireless network saturation.  The WSJ reported this week that AT&T and other carriers are looking to offload mobile data traffic to “city wide” WiFi hotspots in the not too distant future.  This past May, AT&T launched a so-called “Wi-Fi hotzone” —an industry term for a large, outdoor Wi-Fi hotspot—in New York City’s Times Square, in order to test the technology as a supplement to its cellular coverage.

In subsequent months, AT&T, which uses gear from BelAir and others, added hotzones in downtown Charlotte, N.C., and the neighborhood surrounding Chicago’s Wrigley Field. In December, the carrier said it would add more Wi-Fi networks in New York City—including a hotzone launched last week in Rockefeller Center—as well as in San Francisco’s Embarcadero Center.

Meanwhile, Ruckus Wireless, a pioneer in the development of smart WiFi for enterprise and service provider markets, has announced that Chongqing Telecom will be launching a new innovative service, Tianyi Broadband, with the support of Ruckus’ smart WiFi. Chongqing Telecom, a division of China Telecom, aims at a large-scale, citywide deployment of WiFi hotspots with Tianyi Broadband.

Comment:  What we find surprising, is that Cisco is only benefiting indirectly from the surge in mobile data/ video traffic.  You won’t find Cisco gear in any cell tower.  Having shut down their WiMAX RAN operations last year, the company has no presence in mobile broadband = either in wireless access or backhaul.  Today, Cisco’s participation in mobile data networks seems to be limited to selling Ethernet switches, IP routers and IP NGN back end network management systems/OSS’s (mostly to developing country network operators).

The company does sell some wireless gear- enterprise WiFi solutions for campuses as well as home WiFi routers.  But those markets have nothing to do with the cellular networks that carry mobile data or video traffic.  For several years, we’ve wondered if the Cisco has any intentions to participate in the Radio side of mobile data networks. 

Other References:  articles by this author on network operators ability to cope with the mobile data traffic explosion