forecasting the growth of the internet michael minges, telecommunication development bureau (bdt),...
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Forecasting the growth of Forecasting the growth of the Internet the Internet
Michael Minges, Michael Minges, Telecommunication Telecommunication
Development Bureau (BDT), Development Bureau (BDT), International International
Telecommunication Union (ITU)Telecommunication Union (ITU)
Market Forecasting in the Telecoms Industry, 25-27 May 1998, Hongkong
Why is Internet Why is Internet forecasting important?forecasting important?
Global phenomenon Growing market Revenue potential
87%
52%
6%Telephone
lines
Cellularsubscribers
Internethosts
Compound AnnualGrowth Rate 1990-97
Source: ITU.
“…the most promising new economic opportunity in decades.”
—Bill Clinton
What Internet numbers are What Internet numbers are important?important?
Network size
Traffic
Market value
Network sizeNetwork size
Host computers Physical connections
Subscribers Paying customers
Users People accessing
267’400Subscribers
57’600Hosts1.9%
500’000Users
Source: TAS, Nielsen, Network Wizards.
Singapore
Internet Profile 1997
8.6%
Percent ofpopulation
16.1%
Internet hostsInternet hosts
“Tight” definition (IP address)
“Scientific” method Regular surveys:
Network WizardsTwice a year counts of all hosts
RIPEMonthly counts of European hosts
Marks minimum size of Internet 0
5
10
15
20
25
30
Oct
-90
Jan
-92
Jan
-94
Jan
-96
Jan
-98
Ho
sts
(m)
0
1
2
3
4
5
6
Pe
r 1'0
00
pe
op
le
Hosts (m)Per 1'000 people
Internet hosts, world
Source: ITU adapted from Network Wizards.
5.07
29.7m
0.06
0.313m
Hosts: How reliable?Hosts: How reliable?
0
5
10
15
20
25
30
Jan
-91
Jan
-92
Jan
-93
Jan
-94
Jan
-95
Jan
-96
Jan
-97
Jan
-98
Adjusted
Old
Network Wizards January 1998 methodology change
Differences between Network Wizards and RIPE
Where do hosts actually reside (e.g., .COM)?
Internet hostsmillion
Source: Network Wizards.
China
16’322
32’272Trend
Actual
1-95 7-97 1/98
Internet hosts: Internet hosts: High growth over?High growth over?
0
5
10
15
20
25
30
1994 1995 1996 1997
0%
20%
40%
60%
80%
100%
120%
140%
160%
180%HostsGrowth
Internet HostsWorld, millions
0.0
0.5
1.0
1.5
2.0
2.5
3.0
1994 1995 1996 1997
0%
20%
40%
60%
80%
100%
120%
140%
160%
180%HostsGrowth
Internet HostsAsia-Pacific, millions
Source
: N
etw
ork
Wiz
ards
.
Internet hosts: macro forecastInternet hosts: macro forecast
55
225
71
37
0
50
100
150
200
250
Jul-
98
Jul-
99
Jul-
00
Jul-
01
Jul-
02
Peak of highest growth
Growthlevels off
Source: Dr. Mario Hilgemeierhttp://tunix.is-bremen.de/~mhi/inetgrow.htm
Internet hostsmillions
S-Curve
Trend
High projection
S-Curve error limit
Source: ITU.
Internet hosts: Micro variablesInternet hosts: Micro variables
IndiaChina
IndonesiaPhilippines
MalaysiaThailand
Japan
TaiwanKoreaAustralia
HongkongSingapore
Internet hosts per 1’000 inhabitants
GD
P p
er c
apit
a
India
China
IndonesiaPhilippines
Thailand
Malaysia
AustraliaKorea
Singapore
Taiwan
HongkongJapan
Tel
eph
on
e lin
es p
er 1
00 p
eop
le
Internet hosts per 1’000 inhabitants
Determinants of Internet penetration:
Income Telephone lines PCs Age, education &
language
R2=0.45
R2=0.56
Internet users: Internet users: How many online?How many online?
0
20
40
60
80
100
120
Jan-
90
Jan-
92
Jan-
94
Jan-
96
Jan-
98
0
1
2
3
4
5
6
Use
rs (
m)
Users per host
Source: MIDS.
Users per host
Internet UsersWorld, millions
Source: NUA Surveys.
Africa &Middle East
1%
Canada & USA59%
Europe20%
Asia-Pacific
16%
SouthAmerica
6%
Internet UsersMay 1998
119.5 million
Internet users:Internet users:Guesswork?Guesswork?
Loose definition makes estimating Internet users difficult
Wide variation in estimates
Previously multipliers, now surveys
0.0
0.2
0.4
0.6
0.8
1.0
1.2
1.4
1.6
India
11/97ABS
9/97IDC
11/97Wired
9/97NASSCOM
Australia
Internet UsersMillions
Source: ITU adapted from NUA Internet Surveys.
“There is no way to determine how many users are on the net, besides making guesses and estimates.” —Network Wizards
Users forecastUsers forecast
1.1257
377
707
300
500
1989 1996 1999 2000
MIDS
ITU
Will grow faster than hosts
Limited by various variables (number of PCs, telephone lines, etc.)
Internet usersWorld, million
Source: ITU, MIDS.
Internet commerceInternet commerce
Equipment & software for building the Internet
Charges for accessing the Internet
Advertising Sales of products and
services over the Internet 180
74222.70.1
377
717
1'234
1995 1997 1999 2001
Web revenuesUS$ billion
Source: ActivMedia.
Internet Telephony:Internet Telephony:Threat or opportunity?Threat or opportunity?
Price Quality Regulation Modes
The EconomistMay 2nd 1998
“Future Public Networks will be IP based. Until recently we all have been putting Data over Voice Networks. Now we will be putting Voice over Data Networks.” —Jeff Pulver
Computer to computer Since 1994 Conversation between two similarly
equipped computer users via Internet
Computer to telephone Since 1996 Internet user interconnecting with Public
Telephone Network via an intermediaryservice provider (e.g., call-back company) or a service provider’s Website
Telephone to telephone Since 1997 Telephone carrier routes telephone or
fax message via a data network (Internet, frame relay) rather than viathe Public Telephone Network
Internet telephony:Internet telephony:Different modesDifferent modes
Telephone TelephonePublic Switch
Internet
Phone Gateway Computer
Phone Gateway Computer
Phone Gateway Computer
TelephonePublic Switch
Internet
Internet
Phone Gateway Computer
Phone Gateway Computer
IP Telephony traffic forecastIP Telephony traffic forecast
325
46'870
0.41%
25%
0
5'000
10'000
15'000
20'000
25'000
30'000
35'000
40'000
45'000
50'000
1997 1998 1999 2000 2001 2002 2003
Mil
lio
ns
of
call
min
ute
s
0%
5%
10%
15%
20%
25%
30% % In
ternatio
nal call m
inu
tes
International IP call minutes
% of international call minutes
Source: Analysys (www.analysys.com).
SummarySummary
“It is not possible to determine the exact size of the Internet, where hosts are located, or how many users there are.” —Network Wizards
www.itu.int/ti