analysys mason document · an in-depth analysis of the trends, drivers and ... 2014 and 2019, and...

© Analysys Mason Limited 2014

Fixed network data traffic worldwide: forecasts and analysis 2014–2019

Research Forecast Report

Fixed network data traffic worldwide: forecasts and

analysis 2014–2019

March 2014

Rupert Wood



About this report

This report provides:

a 5-year forecast of key fixed data traffic KPIs

(measured by bandwidth and volume) for 8 geographical

regions and 18 individual countries

an in-depth analysis of the trends, drivers and

forecast assumptions for each of the metrics

an analysis of the causes of differences between

countries

a summary of results, key implications and

recommendations for fixed operators.

The report sizes and forecasts the scale of data traffic

(Internet and other) on fixed networks. This includes traffic

from mobile devices, but delivered over Wi-Fi and fixed

networks. In this respect, the metrics overlap with those in

Analysys Mason‟s companion forecast Wireless network

traffic worldwide: forecasts and analysis 2013–2018.

This report draws on Analysys Mason‟s regional, FTTx and

wireless traffic forecasts.

For the complete data set, see the accompanying Excel file

at www.analysysmason.com/FNDT-Mar2014.

2

Geographical Major KPIs

Eight geographical regions

The following countries are

modelled individually:

Australia

China

France

Germany

Hong Kong

India

Italy

Japan

Nordic region

Poland

Portugal

Romania

Russia

South Korea

Spain

Turkey

UK

USA

Total annual data traffic

Internet

on-net IP

multicast

Mean and median data traffic per

connection

Internet

on-net IP

Mean upstream and downstream

data traffic per connection

Peak (busy-hour) bandwidth per

connection

Fixed data traffic from mobile

devices (handsets and tablets)

Total fixed broadband

connections

Total next-generation access

connections (>30Mbps access

downstream)

Figure 1: Summary of report coverage [Source: Analysys Mason, 2014]



Contents [1]

7. Executive summary

8. Executive summary

9. Key implications

10. Key implications

11. Forecasts

12. The report measures and forecasts IP data generated by fixed

broadband connections

13. The report covers three broad classes of data traffic: Internet, on-net

and multicast IPTV

14. Fixed data traffic worldwide will increase by a factor of 3.6 between

2014 and 2019, and on-net traffic will grow faster than Internet traffic

15. The strongest growth in traffic will be in emerging economies

16. The highest average usage levels will be in Central and Eastern Europe

and North America

17. Smartphones and tablets will account for 23% of worldwide fixed data

traffic by 2019, but mobile data will account for just 5.2% of total data

18. Market drivers and inhibitors

19. Fixed data traffic is more difficult to forecast than mobile because it has

fewer supply-side constraints

3

20. Summary of drivers and inhibitors of fixed data traffic

21. The number of fixed broadband connections has room for substantial

growth in emerging economies

22. The varied levels of fixed broadband data usage recorded round the

world indicate that the set of drivers is complex

23. Demand for intensive data usage and FTTH is associated with middle

incomes

24. There is little correlation between high mobile and high fixed data usage

25. Wi-Fi smartphones probably depress average volume of data traffic per

fixed broadband connection

26. Larger TV screens are on the way, but it is multiple tablets rather than

UHDTV that will drive usage before 2018

27. Take-up of smart TV is fast, but activation is some way behind

28. High data usage in developed economies appears to be linked to use of

TV rather than access to next-generation networks

29. The future of RF broadcast is less dependent on the continued use of

linear TV than on the relative efficiencies of RF and broadband

30. The growth in consumer on-net data traffic will be affected by different

approaches to net neutrality and the commercial power of telcos

Slide no. Slide no.



Contents [2]

31. The difference between mean and median usage will grow

32. On-net traffic has different busy-hour characteristics from Internet, and

backhaul bandwidth requirements will grow faster than data

consumption

33. Despite cloud services, traffic will become more asymmetric over time

34. The commercial significance of fixed operator public Wi-Fi far outweighs

the volume of traffic

35. Access speed and data usage

36. Slow access speeds always constrain usage, but high speeds do not

always encourage it

37. Speeds of 8–24Mbps are currently sufficient for mass-market connected

TV, including HDTV

38. A plausible upper-limit, service-based use case should be built on

screens per household, and their substitutability, not on applications

39. Demand for access bandwidth is in reality driven by marketing and inter-

platform competition, and this expands capacity headroom

40. Multi-gigabit consumer access could trigger an entirely different future

pattern of consumption

4

41. Market definition and methodology

42. Definition of geographical regions [1]

43. Definition of geographical regions [2]

43. About the author

44. About the author

Slide no. Slide no.



List of figures [1]

Figure 1: Summary of report coverage

Figure 2: Scope of this forecast

Figure 3: Three classes of fixed data traffic

Figure 4: Total fixed IP data traffic in access network, worldwide, 2012–

2019

Figure 5: Total Internet and on-net data traffic, by region, worldwide, 2012 –

2019

Figure 6: Growth of Internet and on-net data traffic, by region, worldwide,

2014–2019

Figure 7: Average Internet and on-net usage per connection, by region,

worldwide, 2013 and 2019

Figure 8: Fixed and mobile IP data traffic, by type, worldwide, 2014–2019

Figure 9: IP data traffic by mobile network and devices, worldwide, 2014-

2019

Figure 10: Fixed broadband connections, by region, 2013–2019

Figure 11: Proportion of fixed broadband connections capable of over

30Mbps downstream, by region, worldwide, 2013–2019

Figure 12: Average Internet usage per fixed broadband connection where

available from regulator

Figure 13: FTTH take-up rates by geographical location and GDP, selected

nationally significant FTTH roll-outs

Figure 14: Fixed Internet and mobile data usage per capita, selected

countries, end of 2013

5

Figure 15: Average hours not spent at work or travelling to work, and

average monthly mobile data usage per head of population, 2012

Figure 16: Share of tablets with activated 3G/4G connection, mid-2013

Figure 17: Bandwidth and volume requirements of file formats, 2014

Figure 18: Penetration of connected smart TVs, by country and pay-TV

subscription

Figure 19: Connected smart TVs as a percentage of smart TVs by country

and pay-TV subscription

Figure 20: ISP data usage and growth relative to customer attributes, and

year-on-year growth, UK, end of year 2013

Figure 21: On-net share of total Internet and on-net traffic, by region,

worldwide, 2013–2019

Figure 22: Mean and median data usage (excluding multicast IPTV),

Western Europe, 2013–2019

Figure 23: Bandwidth by peak and average ratio, worldwide, 2011–2019

Figure 24: Downstream and upstream Internet and on-net traffic (excluding

multicast IPTV), worldwide, 2013–2019

Figure 25: Average upload and download volumes per connection, Japan

Figure 26: Average fixed Internet traffic per fixed broadband connection, and

BSkyB‟s average traffic per dedicated AP, UK, 2012 and 2013

Figure 27: Public Wi-Fi‟s share of total Internet traffic (fixed and mobile), and

of mobile Internet plus public Wi-Fi, worldwide, 2011–2018



List of figures [2]

Figure 28: Relationship between access speed and usage, USA, April 2012

Figure 29: Approximate usage per speed tier, Telekom Deutschland

bitstream services, 1H 2011, 2H 2012 and 2H 2013

Figure 30: Illustrative required connection speeds, based on multi-usage and

quality of service

Figure 31: Use case for top-1% user, by screen and application, 2012–2020

Figure 32: Use case for top-1% user, bandwidth by application, 2012–2020

Figure 33: Slower-than-, equal-to-, and faster-than-real-time speeds, and

bandwidth requirements

Figure 34: Regional breakdown used in this report

Figure 35: Regional breakdown used in this report

Figure 36: Fixed Internet traffic forecast methodology

6



0

0.5

1

1.5

2

2.5

0 10 20 30 40 50

Mo

bile

(G

B p

er

ca

pita

pe

r m

on

th)

Fixed (GB per capita per month)

There is little correlation between high mobile and high fixed data usage

Using only those countries with clear information from

regulators on fixed data usage, we can map a figure for

Internet data usage against equally validated figures for

mobile data usage. These figures have been normalised by

projecting them forward, where only earlier quarterly data is

available, to end of year 2013 (see Figure 14).

There is little immediately obvious correlation between fixed

Internet and mobile data usage among these countries. We

have added countries for which we have clear data in mobile

usage (shown with pink markers in Figure 14), but have only

some operator-level data for fixed. Again, there are more

exceptions to explain away than there are clear patterns.

In only one of these countries, Japan, does cellular traffic

exceed 10% of total data traffic. In three (France, Germany

and Romania) mobile is less than 2.5% of the total.

The countries with high usage in both areas all have highly

advanced fixed and mobile networks. The high mobile usage

in the Nordic region is largely caused by use of USB modems

as a fixed substitute, whereas this is not the case in the other

high-use countries. This could have the effect of removing

light broadband users from the user base of fixed broadband,

thereby raising average usage on fixed broadband.

24

Figure 14: Fixed Internet and mobile data usage per capita, selected

countries, end of 2013 [Source: Analysys Mason, 2014]

USA

Hong Kong

Japan

Australia

UK

Germany Portugal

Italy

Spain Turkey

Nordics

Romania

South Korea

Russia

Poland

France

>10%

mobile

5–10%

mobile

2.5–5%

mobile

<2.5%

mobile



0%

10%

20%

30%

40%

50%

0

50

100

150

200

250

20

13

20

14

20

15

20

16

20

17

20

18

20

19

Pe

rce

nta

ge

of

me

an

da

ta u

sa

ge

Da

ta u

sa

ge

(GB

per

connection

per

mo

nth

)

The difference between mean and median usage will grow

The median measure is important for fixed operators

because 50% of connections will take a much smaller

fraction of the traffic load. This long tail of light users is more

vulnerable to fixed-to-mobile broadband substitution.

LTE networks have, compared to any fixed network, very

limited capacity, unless they also have an exceptional level of

physical infrastructure or an exceptional level of spectrum.

Despite this, LTE networks have, especially in the period

immediately after roll-out, high levels of spare capacity that

can be sold as a substitute for fixed broadband. These

services have historically been targeted at the lighter user,

and mobile operators in some advanced economies have

been able to take about 20% of broadband subscriptions.

The worldwide median data usage worldwide was about

14GB per month at 2013, and the median connection had no

on-net usage (in other words, over half of connections

consumed no on-net data).

The median as a proportion of the mean will shrink over the

period of the forecast in most economies. Taking Western

Europe as an example, it will decline from 37% of the mean

in 2013 to 29% of the mean by 2019. The reasons for this are

bound up with the sudden changes to subscriber usage that

the introduction of IPTV set top boxes for catch-up and VoD.

31

Figure 22: Mean and median data usage (excluding multicast IPTV), Western

Europe, 2013–2019 [Source: Analysys Mason, 2014]

A family connection consuming say 30GB per month will,

when it gets a catch-up TV or VoD box, very quickly increase

its usage by a factor of about three, and although typically

this figure will fall back a little when the novelty has worn off

the difference will still be stark. Catch-up TV in particular

substitutes DVR functionality. Since only a minority will have

the set-top boxes, the median figure will not rise as fast as

the mean, but could rise quickly and overtake the mean when

a majority has the box.

On-net

Internet

Internet

Total

Median's share

of mean

Volume:

Mean

Median


Fixed network data traffic worldwide: forecasts and analysis 2014–2019 45

Executive summary

Key implications

Forecasts

Market drivers and inhibitors

Access speed and data usage

Market definition and methodology

About the author and Analysys Mason



About the author

Rupert Wood (Principal Analyst) is the lead analyst for Analysys Mason‟s Fixed Networks research programme. His

primary areas of specialisation include next-generation networks, long-term industry strategy and forecasting the

dynamics of convergence and substitution across fixed and mobile platforms. Rupert regularly contributes to the

international press on a wide range of telecoms subjects and has been quoted by The Times, The Economist,

Business Week, Telecommunications Online and La Tribune. Rupert has a PhD from the University of Cambridge,

where he was a Lecturer before joining Analysys Mason.

46



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