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Marcelo Ehalt Brazil Partner Organization Cloud & Managed Services

June 2015

Cisco Visual Networking Index and VNI Service Adoption Brazil & Latin America Forecast Update, 2014–2019

2 © 2015 Cisco and/or its affiliates. All rights reserved. Cisco Confidential

Cisco Visual Networking Index (VNI) Global Service Adoption & IP Traffic Growth

Cisco VNI Forecasts are complementary and statistically aligned.

VNI

Service Adoption Forecast

Fixed & Mobile IP Traffic Forecast

FIXED MOBILE RESIDENTIAL MOBILE BUSINESS


2.0 zettabytes is equal to:

•  12X more than all IP traffic generated in 2009 (169 exabytes)

•  30 hours of ultra-HD video per person of the world population

By 2019, global IP traffic will reach an annual run rate of 2.0 zettabytes per year

•  One trillion gigabytes

•  Approximately 1021 (1,000,000,000,000,000,000,000 bytes)

What is a zettabyte?

Source: Cisco VNI Global IP Traffic Forecast, 2014–2019

Establishing the Zettabyte Era


Global IP Traffic Growth / Top-Line Global IP Traffic will Increase 3-Fold from 2014─2019

23% CAGR 2014–2019

59.9 72.4

88.4 109.0

135.5

168.0

0

20

40

60

80

100

120

140

160

180

2014 2015 2016 2017 2018 2019

Exabytes per Month



0

2

4

6

8

10

12

14

2014 2015 2016 2017 2018 2019

Chile (23% CAGR)

Argentina (21% CAGR)

Mexico (29% CAGR)

Rest of LATAM (31% CAGR)

Brazil (19% CAGR)

LATAM IP Traffic Growth / Regions Rest of LATAM has the Highest Growth Rate (31%) from 2014–2019

Exabytes per Month


25% CAGR 2014–2019

27%

34%

24%

9% 6%

Grow from 1.9 to 4.4 Exabytes per Month


Drivers


Global IP Traffic & Service Adoption Drivers

More Devices & Connections

More Internet Users

Faster Broadband Speeds

More Video Viewing


By 2019:

2014 2019 14.2 Billion 24.4 Billion

2014 2019 20.3 Mbps 42.5 Mbps

2014 2019 2.8 Billion 3.9 Billion

2014 2019 67% of Traffic

80% of Traffic

IP Broadband Growth Drivers


Brazil IP Traffic & Service Adoption Drivers

More Devices & Connections

More Internet Users

Faster Broadband Speeds

More Video Viewing


By 2019:

2014 2019 429 Million 785 Million

2014 2019 8.3 Mbps 19 Mbps

2014 2019 88 Million 134 Million

2014 2019 68% of Traffic

84% of Traffic

IP Broadband Growth Drivers


Top Trends


VNI Forecast Update, 2014–2019 Top 10 Networking Trends

1 Continued Shifts in Devices/Connections Mix

2 IPv6 Adoption Enables Internet of Everything (IoE) Connectivity

3

4 Service Adoption Trends – Residential, Consumer Mobile, Business

5 Applications Driving Traffic Growth

6 “Cord-Cutting” Analysis – What’s Really Happening?

7 Impact of Accelerating Speeds on Traffic Growth

8 Mobility (Wi-Fi) Continues to Gain Momentum

9 Traffic Pattern Analysis (Peak vs. Average, Upstream, CDN vs. Metro)

10 Network Performance Drives User Behaviors/Data Plans and Caps

M2M Applications Across Many Industry Verticals Drives IoE Growth





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Global Device/Connection Growth by Type By 2019, M2M Connections Will be More Than 40% of Total Connections

0

5

10

15

20

25

30

2014 2015 2016 2017 2018 2019

Other (4.9%,3.6%)

Tablets (3%,4%)

PCs (11%,6%)

TVs (11%,12%)

Non-Smartphones (32%,13%)

Smartphones (15%,19%)

M2M (24%,43%)

Billions of Devices

* Figures (n) refer to 2014, 2019 device share Source: Cisco VNI Global IP Traffic Forecast, 2014–2019

12% CAGR 2014–2019

785.3 million networked devices in 2019, up from 492.7 million in 2014. 32% M2M, 25% Smartphones, 15% connected TVs, 13.6% other phones, 7% PC, 3% tablets


Global Video Capable Device Growth by Type By 2019, Smartphones More Than 40% of Total Video Capable Devices

0

2

4

6

8

10

12

2014 2015 2016 2017 2018 2019

Other (0.8%,0.3%)

Tablets (7%,8%)

M2M (3%,9%)

PCs (26%,14%)

TVs (26%,27%)

Smartphones (36%,42%)


14% CAGR 2014–2019

* Figures (n) refer to 2014, 2019 device share

Billions of Devices

41-45%


Brazil Average IP Traffic Per Device

2014 2019

Wearable Device Smartphone

Tablet

GBs per Month GBs per Month

0.8 3.6

6.3 26.5

24.0 37.8

0.4 3.6

M2M Module

Smartphone

Tablet

Laptop / PC

0.05 0.39

Ultra High Definition TV*

Source: Cisco VNI Global IP Traffic Forecast, 2014–2019 *Note: Includes IP VoD traffic





3

4 Service Adoption Trends – Residential , Consumer Mobile, Business









0

2

4

6

8

10

12

2014 2015 2016 2017 2018 2019

IPv6 Capable Mobile Devices

IPv6 Capable Fixed Devices

2.0B

3.7B

1.0B

Global IPv6-Capable Devices/Connections By 2019, 41% of Devices/Connections Will be IPv6-Capable

6.2B

Number of Devices

(B)


26% CAGR 2014–2019

360 million IPv6-capable devices in 2019, up from 113 million in 2014 (26% CAGR). 46% of all fixed & mobile networked devices will be IPv6-capable in 2019 (23% in 2014).


0 5

10 15 20 25 30 35 40 45 50

2014 2015 2016 2017 2018 2019

Middle East and Africa (MEA) (106% CAGR)

Latin America (LATAM) (75% CAGR)

Central and Eastern Europe (CEE) (99% CAGR)

Western Europe (WE) (66% CAGR)

North America (NA) (79% CAGR)

Asia Pacific (APAC) (74% CAGR)

Global IPv6 Traffic Growth / Regions By 2019, IPv6 Will Represent 34% of Total Internet Traffic

22.4%

33.7%

11.6%

6.5%

17.9% Exabytes per Month

7.9%

2.6

46


77% CAGR 2014–2019

227% - 17x





3

4 Service Adoption Trends – Residential , Consumer Mobile, Business








19 © 2015 Cisco and/or its affiliates. All rights reserved. Cisco Confidential Source: Cisco VNI Global IP Traffic Forecast, 2014–2019

By 2019, M2M modules will be 43% of total global devices and connections and will account for 3% (4.6 EBs/month) of total global IP traffic.

In Brazil, M2M modules will account for 32% (251.2 million) of all networked devices in 2019.


Global M2M Connections / IoE Growth By Vertical By 2019, Connected Home Largest, Connected Health Fastest Growth

-

2

4

6

8

10

12

2014 2015 2016 2017 2018 2019

Other* (38.2% CAGR) Energy (31.9% CAGR) Manufacturing & Supply Chain (8.9% CAGR) Retail (10.5% CAGR) Connected Cities (28.2% CAGR) Connected Health (49.4% CAGR) Connected Car (37.3% CAGR) Utilities (21% CAGR) Connected Work (Ent Mgmnt) (29.4% CAGR) Connected Home (23.1% CAGR)


26% CAGR 2014–2019

Billions of M2M

Connections

*Other includes Agriculture, Construction & Emergency Services


Internet of Everything Increasing Home Connectivity

Source: Cisco VNI Global IP Traffic Forecast, 2014–2019 Note: Globally, there will be 2.2 billion households by 2019

On average, there will be more

than two connected home modules per global

household by 2019

2019 5.0 Billion Connected

Home Modules

2014 1.8 Billion Connected

Home Modules

HVAC and Lighting Systems

Home Security Fire Alarm

Smart Appliances

Child, Pet and Personal Items

Tracking

Printers, Scanners,

Home Routers

Distributed Screens





3










26 33 44 59

80 108

14 17

19 22

24

27

13 15

18

21

24

26

0

20

40

60

80

100

120

140

160

180

2014 2015 2016 2017 2018 2019

Gaming (0.05% , 0.08% ) File Sharing (11.6% , 4.3% ) Web/Data (21.3% , 15.5% ) IP VoD (23.6% , 16.0% ) Internet Video (43.4% , 64.1% )

Global IP Video Traffic Growth IP Video Will Account for 80% of Global IP Traffic by 2019


23% CAGR 2014–2019

Exabytes per Month

* Figures (n) refer to 2014, 2019 traffic shares

IP video traffic will grow 3x from 2014 to 2019, 1.2 to 3.7 Exabytes per month. Consumer Internet video traffic will be 84% of consumer Internet traffic in 2019 (68% in 2014).


Global Video Users/ Subscribers Online & Mobile Video Growing Faster Than Digital TV

1,000

1,500

2,000

2,500

3,000

2014 2015 2016 2017 2018 2019

Online Video ( 7.3% CAGR) Digital TV HH ( 4.9% CAGR)

Mobile Video ( 21.0% CAGR)

Users/ Subscriptions

(M)


24 27 31 35 40 44 16 22

30 40

54 72

0

20

40

60

80

100

120

140

160

2014 2015 2016 2017 2018 2019

Ultra-High Def (UHD) Video (0.6% , 13.9% )

High Def (HD) Video (38.6% , 53.5% )

Standard Def (SD) Video (60.8% , 32.6% )

Higher Definition Content Impacts Global IP Video Growth Ultra-HD IP Video Will Account for 14% of Global IP Video Traffic by 2019


27% CAGR 2014–2019

Exabytes per Month

* Figures (n) refer to 2014, 2019 traffic shares

Ultra HD will be 4.6% of Internet video traffic in 2019, HD will be 39.5% and SD will be 55.9%





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92

0

20

40

60

80

100

2015

Average Household

Cord-Cutting Household

43


GB per Month

Global Cord-Cutting Generates Double the Traffic A Cord-Cutting Household Generates 92 GB per Month in 2015, Compared to 43 GB per Month for an Average Household





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Global Average Fixed Broadband Speeds Doubling in Speeds From 2014-2019

2014 2019 Global Mbps

BY REGION North America Western Europe

Asia-Pacific

Central & Eastern Europe

Middle East & Africa

Latin America

GLOBAL


BY COUNTRY Argentina Brazil Mexico

20.3

21.8 21.8

7.2 23.2

22.2

6.1

42.5

43.7 49.1

16.9 48.9

45.3

14.9

4.4 8.3

14.9 18.6

7.3 19.1





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Surge of Hotspots Globally, there will be 341 million hotspots by 2018 •  By 2018, the US leads in total number of hotspots,

followed by China and France •  Europe is the “continent of Wi-Fi” with 50% of the

world’s Wi-Fi estate in 2014. By 2018, Asia will lead. •  Today, China has 5 times more commercial Wi-Fi

hotspots than any other country •  Community Wi-Fi has been driven by Europe and

then North America, but Asia will catch up in 2018

Source: Maravedis Rethink and iPass Inc.


0

20

40

60

80

100

120

140

160

180

2014 2015 2016 2017 2018 2019

Mobile Data (57.3% CAGR) Fixed/Wired (11.4% CAGR) Fixed/Wi-Fi from Mobile Devices (67.5% CAGR) Fixed/Wi-Fi from Wi-Fi Only Devices (21.1% CAGR)

17%

Global IP Traffic by Local Access Technology By 2019, Two-Thirds of Total IP Traffic Will Be Wireless*

33%

36%

14%


23% CAGR 2014–2019

Exabytes per Month

* Wireless traffic includes Wi-Fi and mobile

Fixed/Wi-Fi will be 55% of total IP traffic in 2019, Fixed/Wired will be 31% and Mobile will be 14%.





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Global Busy Hour vs. Average Hour Internet Traffic Driven by Video, Busy Hour Grows Faster than Average Hour

0

200

400

600

800

1,000

1,200

1,400

1,600

2014 2015 2016 2017 2018 2019

Average Hour

Busy Hour


Traffic Rate (Tbps)

31% CAGR

26% CAGR


0

2

4

6

8

10

12

14

Upstream

Other File Sharing Web/Data Cloud Downloads Internet Video

Global Upstream Traffic Upstream is 23% of Bi-Directional Traffic Cloud is 13% of Upstream Internet Traffic


Exabytes per Month





3









37 © 2015 Cisco and/or its affiliates. All rights reserved. Cisco Confidential Source: Cisco VNI Global IP Traffic Forecast, 2014–2019

Average Global Internet Bandwidth Usage

Average Traffic per User

2014

16 GB per month

2019

37 GB per month

Future

75 GB per month

Average Traffic per Household

2014

37 GB per month

2019

91 GB per month

Future

150 GB per month


Higher Fixed Speeds Enable Greater Video Consumption Video Behaviors are Consistent Across Multiple Countries

-

500

1,000

1,500

2,000

2,500

3,000

- 10 20 30 40 50 60 Fixed Broadband Speeds (Mbps)

Video Minutes per Viewer

Linear (Video Minutes per Viewer)

Indonesia

India

Argentina Italy

Mexico

Brazil

Australia

Chile

Russia

Canada

U.K.

Japan

Germany

China

New Zealand

France

Spain

U.S.


Video Minutes

per Viewer


Global Faster Networks Enable Better Experiences

35% of fixed bb connections by 2019

Online Video (HD movie download)

22 minutes (UHD movie download)

2 hours

10 Mbps

13.5% of fixed bb connections by 2019


9 minutes (UHD movie download)

48 minutes

25 Mbps

10.7% of fixed bb connections by 2019


4.5 minutes (UHD movie download)

24 minutes

50 Mbps


Conclusion


Cisco VNI Global IP Forecast, 2014–2019 Key Takeaways / Summary

IP Traffic By 2019, global IP traffic will reach 168 EBs/month (2.0 ZBs/year), and 4.4 EBs/month (53 EBs/year) in Brazil.

Mobile Traffic By 2019, 14% of IP traffic will be carried over cell networks in Brazil and globally.

Wi-Fi Traffic By 2019, Fixed Wi-Fi will generate 52% IP traffic globally and 55% in Brazil.

IP Video Traffic By 2019, over 80% of the world’s IP traffic will be video. In Brazil it will represent 84% (65% in 2014).

Broadband Speeds By 2019, in Brazil the average fixed broadband speed will more than double (8.3 Mbps to 19 Mbps).

Devices/Connections By 2019, the number of of devices per capita will be 3.2 globally and 3.7 in Brazil.

Global Internet Users By 2019, there will be 3.9 Billion global internet users, representing 51% of the global population.


Brazil Internet Users By 2019, in Brazil there will be 134 million total Internet users, 64% of population (88 million in 2014).


Cisco VNI Web Sites

•  Press Release •  White Papers / FAQs

•  Cisco VNI Web-based Tools / Free Apps

IP Traffic Forecast inquiries: [email protected] Service Adoption Forecast inquiries: [email protected]

IP Traffic Forecast: http://www.cisco.com/go/vni Service Adoption Forecast: http://www.cisco.com/go/vnisa

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