digital connectivity Tommy van der Vorst Senior - - PowerPoint PPT Presentation

Understanding the demand growth for digital connectivity

Tommy van der Vorst

Senior researcher/consultant Dialogic +31 655543708 vandervorst@dialogic.nl June 19th, 2018

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How much bandwidth will consumers demand over the next decade?

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10.000 100.000 1.000.000 10.000.000 TB per month Year

Incoming traffic volume at the AMS-IX

Predicted (CAGR=40,2% over the period 2007-2017) Average incoming traffic volume per month (TB)

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1,0 6,0 11,0 16,0 21,0 26,0 31,0 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 Traffic volume compared to 2013

Forecasted growth of aggregate traffic volume

Downstream (CAGR=41,5%) Upstream (CAGR=44,9%)

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50 100 150 200 250 300 350 400 450 2016 2017 2018 2019 2020 2021 2022 Provisioned speed (Mbit/s)

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Forecasted development of the average sufficient provisioned speed Downstream (CAGR: 40,5%) Upstream (CAGR: 44,1%)

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0% 5% 10% 15% 20% 25% 30% 35% 40% 45% 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 Upstream / downstream traffic

Up vs. down

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What is generating this demand at the consumer side?

11 Current quality (MB/hr) Current intensity (hr/hr) Current adoption (%) Future quality (MB/hr) Future intensity (hr/hr) Future adoption (%) Future aggregate daily average volume (MB/day) Currently required advertised speed (Mbit/s) Future required advertised speed (Mbit/s) Urgency model Urgency model For each user group: Current daily total average volume (MB/day) Future daily average volume for service category (MB/day) Distinguish service categories Regression x Adoption curve fitting Regression Regression 3 4 5 6 7 9 8 Future aggregate daily average volume (MB/day) Current daily average volume for service category (MB/day) / ∑ Extrapolation (historical CAGR of aggregate volume) 2 Residual Δ H1 H2 H3 Distinguish user groups 1 For each service category:

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• 2.000

4.000 6.000 8.000 10.000 12.000 14.000 16.000 18.000 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 Downstream demand (Mbyte/day)

Forecasted downstream traffic demand by service category

Other services Consultative web browsing Remote workplace File downloads Personal cloud storage Social media / Web 2.0 Online video and music (streaming and P2P) Overhead Residual

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Questions, questions, questions…

• Will bandwidth supply growth continue

exponentially?

• Will bandwidth demand growth continue

exponentially?

• Will we be able to fill ‘the residual’?
• Will fixed household connections lose relevancy

in an increasingly wireless world?

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Volume demand per service = Intensity Quality

“n/N people watch X hours of Netflix per day at full-HD resolution”

Adoption

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The differences between user groups are huge

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There are huge differences between user groups

0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% 0% 20% 40% 60% 80% 100% % of total daily upstream traffic volume Users (from high to low daily upstream traffic volume)

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1 10 100 1.000 10.000 100.000 1.000.000 2014 2015 2016 2017 2018 2019 2020 2021 2022 Average traffic per subscription (Mbyte/day) Year

Estimated downstream demand growth per user group

Power users Innovators Mainstream users Laggards

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Broadband demand is driven by technological trade-offs.

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Fundamental trade-off in ICT

Store Compute Transmit

Stream or download? Centralize or decentralize? Cache or recompute?

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Fundamental trade-off in ICT

Store Compute Transmit

Cost Compactness Performance Coverage/availability Latency Jitter …

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1975 1995 2015 Processor speed (MHz) Cheaper 1955 1975 1995 2015 GB/inch2 1990 2000 2010 Latency (ms) 1970 1990 2010 # Transistors / processor 1980 2000 Download speed (bps) 1998 2008 Price per Mbps ($) 10-8 10-19 104 10-1 102 10 106 10 109 10 103 10-6 1010 103 102 10-3 Faster More compact Storage Processing Transmission 0,01 1 100 10000 1000000 1980 2000 Price per GB ($) 1975 1995 2015 Cost of a processor cycle ($) Spectral efficiency (bits/Hz/site) 1970 1980 1990 2000 2010 2020

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Fundamental trade-off

Store Compute Transmit

Fixed Wireless

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There is future demand but we do not yet know what will drive it

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Supply growth (connectivity) Residual? Demand growth explained by existing service categories Adoption growth Quality growth Usage intensity growth

Time

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ITS Seoul 2018 Session B1 Monday (25-6) 15:10 – 16:35 KU Media Hall dialogic.nl/ufbb OR:

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Thank your for your attention!

Tommy van der Vorst (vandervorst@dialogic.nl)

June 19th, 2018

Hooghiemstraplein 33 – 36 3515 AX Utrecht +31 30 215 0580 +31 30 215 0595 info@dialogic.nl dialogic.nl/en