Cisco lowers mobile data traffic growth rate prediction, but still points to booming LTE

Cisco Systems lowered its rate of growth in global mobile data traffic for 2012 and 2013. However, in a new report the company still forecasted a nearly 11-fold increase in mobile data traffic from 2013 – 2018.

Cisco's latest Visual Networking Index Global Mobile Data Traffic Forecast report indicates that traffic growth was lower than it had originally anticipated. Last year Cisco was criticized by analysts and research firms for the multiple backward revisions it made in its data. Cisco acknowledged the revisions it made this year (as it did last year). The networking vendor said that lower traffic from laptops with cellular connections, as well as other factors such as slower LTE adoption in some markets, contributed to the downward revisions.

"Last year we projected a monthly traffic volume of 885 petabytes in 2012," said Thomas Barnett, director of service provider marketing at Cisco. "The actual [figure] in 2012 was 820 petabytes." Additionally, last year in its 2012 – 2017 forecast, Cisco projected that in 2013 the monthly traffic figure would climb to 1.6 exabytes--a billion gigabytes--when the actual figure came in slightly lower at 1.5 exabytes per month.

Finally, last year Cisco projected that the increase in traffic growth would lead to 11.2 exabytes per month in 2017. This year, Cisco is projecting a lower figure, 10.8 exabytes per month, in 2017.

Cisco forecasts 15.9 exabytes per month of mobile data traffic by 2018.

"Last year, specifically--and we did state this publicly as well--the decreased growth rate was attributed to a reduced number of mobile laptops that were connected," Barnett said. Barnett said that laptops actually had a "bounce-back year" in 2013, with 6 percent growth in Western Europe. He added that revision in the 2017 projection is still less than 10 percent.

"In the same way that we've seen fixed [Internet] traffic taper, it's still growing, but the growth rate is not as high," he said.

Cisco's annual report is widely cited every year by carriers and vendors alike as a key benchmark for measuring and predicting data traffic. It is also used to justify calls for network investment, traffic management technologies and more spectrum.

Despite the kerfuffle over the revisions, Cisco's voluminous report is chock full of data points on LTE traffic growth, the growth of different device categories, including wearables, and regional projections.

Wearable computing emerged as a key theme last year and many wearables were on display at the Consumer Electronics Show in January. According to Cisco, there was a global installed base of 22 million wearables last year, but just 1 percent had embedded cellular connectivity. By 2017, Cisco expects there to be 177 million wearable devices globally and 13 percent of them will have some kind of cellular connectivity. "While there have been vast technological improvements to make wearables possible as a significant device category, the embedded cellular connectivity still has some barriers, such as technology, regulatory and health concerns, to overcome before it becomes widely available and adopted," Cisco said.

Average data traffic per user is also set to skyrocket, according to Cisco, though there are going to continue to be large variations by region. According to the report, average monthly data usage per user was 356 MB per month in 2013, but that average was pulled down by average usage of just 185 MB per month in the Middle East and Africa, and bumped up, for example, by average usage of 1.38 GB per month in North America.

In North America, average monthly usage per user is expected to soar to 8.99 GB per month in 2018, with a global average of 3.05 GB per month in 2018.

Meanwhile, the number of LTE connections is also expected to jump significantly in the years ahead as more carriers deploy LTE networks. Cisco predicts that the global number of LTE connections will jump from 203 million in 2013 to 1.53 billion in 2018. Currently, LTE connections make up just 3 percent of global connections, but that is expected to rise to 15 percent in 2018.

In terms of LTE data traffic, LTE connections will support 51 percent, or 8 exabytes per month, of total mobile data traffic, up from 30 percent, or 448 petabytes per month, in 2013. Last year Cisco said that by 2017, LTE connections would generate 45 percent of the data traffic.

Barnett said that that LTE traffic growth will be driven by the increased adoption of "smart" devices, which Cisco defines as gadgets with advanced computing and multimedia capabilities and at least a 3G connection. The number of "smart" devices as a percentage of all devices will grow from 21 percent in 2013 to 54 percent in 2018, Cisco said. However, there will be large regional variations. By 2018, Cisco expects 94 percent of North American devices to be smart, but only 47 percent in Asia-Pacific and 36 percent in the Middle East and Africa.

Barnett said Cisco lowered its LTE usage expectations in locations like rural India and China because, he said, operators in those markets need to make money and the "economics of that are driving slower than expected growth."

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