This week both the Ericsson Mobility Report and the Cisco VNI got a refresh, the two forecasts which are most listened to, but in our view least accurate in the world. They both agree at least that all IP experiences are driven by the rising use of video on handsets, phones, laptops and smart TVs – with Cisco citing 82% of all IP traffic by 2022 and Ericsson 84% of all mobile traffic turning to video by 2024.
The assumption is that Ericsson must know what’s going on in mobile, as it controls much of it (although not as much as Huawei) and so its forecasts have to be right. The truth is that this has become something of a propaganda platform for Ericsson to sell 5G, and to suggest that all is right with the world of mobile. So pinch of salt taken, let’s dig in to what they say.
With 7.9 billion phones out there, up 120 million (or 3%) in the quarter, you would think that everyone in the world’s population now has a phone – you would be wrong. So the real situation is that 6.2 billion people have phones, and a few have two phones or more. This will only rise by 1 billion more, up to 8.9 billion in the next five years to 2024, says Ericsson, as more people get more phones and more get smartphones, up from 60% today. Many will replace GSM phones with more of the same, such that GSM/Edge phones will only fall 110 million during that time.
But the most interesting contrast between Ericsson’s mostly mobile observations and Cisco’s IP assertions in its Visual Networking Index, is that the average data usage per smartphone will rise by a factor of 4, to just 21 GB (gigabytes) a month, says Ericsson. Cisco points out that each fixed broadband home will use 261 GB a month, around 13 times the mobile data usage. This proves beyond a doubt that even in the 5G era, phone data will remain either too slow or too expensive for people to rely on it for everything. Of course, some of those fixed line minutes will be used on phones, attached by WiFi, a fact which muddies the issue.
But this means WiFi and fixed broadband will continue to hold dominant sway in the world for some years to come. And that sentiment undermines the 5G propaganda, which says that the 50% of the world’s homes which have no broadband, could all adopt 5G instead. Most of those homes don’t currently have 3G coverage, never mind 4G and 5G. However, we do accept that some parts of the world, like Indonesia and India, have weak fixed line infrastructure, and that as more of these customers emerge in Africa and elsewhere, broadband on a phone becomes more important, so that 5.7 billion of the people that use mobile broadband will rise to 8.4 billion, leaving just 500 million customers using their phone just to speak and text.
It is just as well that Ericsson sees VOLTE taking off, as voice on LTE has been very slow to emerge, and says it will rise from 1.4 billion today to some 6 billion by 2024.
But both Cisco and Ericsson see that, increasingly, it is the Asia Pacific region that will dominate usage. In mobile, this region of the world will grow until it is using 39 Exabytes (EB) a month by 2024, while North America will absorb just 19 EB. Ericsson says video is the fastest growing form of traffic, at 35% annual traffic growth.
One important video aspect of Cisco is in analyzing homes which have cut the cord – it’s VNI report says that traditionally broadcast TV homes use 82 GB of data each month today, and that cord-cut homes use almost twice that at 141 GB. Cisco also says that the fastest broadband in 2022 will be delivered from Asia Pacific with an average of 98.8 Mbps, while the US struggles to keep up on 94.2 Mbps and Europe and others struggle in their wake. That is not consistent with current weak US broadband, behind many European countries in both speeds and penetration.
But then again, Cisco also says quite incorrectly that DOCSIS 3.1 will bring the great bulk of 1 Gbps broadband lines, and completely misses the fact that almost no broadband players which offer 1 Gbps outside of the US, do so with anything other than fiber. Our own Rethink TV report on 1 Gbps broadband, out this week, shows that China will not use cable, and yet will leave the US way behind over the next five years on how rapidly it embraces 1 Gbps broadband – email [email protected] for an executive summary – the report is called “US left in China’s wake in the quest for Gigabit broadband – Forecast and Report to 2023”.
Cisco does confirm that 83% of APAC broadband will be above 50 Mbps, with the comparable figure for North America being around 69% by 2022. Of course, China brings up the APAC average, and India and Indonesia drags it down and they should be viewed separately.
Cisco also says there will be 549 million WiFi Hotspots by 2022 and that there were 124 million in 2017, research that we provided for Cisco last year, which our partner Maravedis has provided directly this year. We can at least vouch for the number of Homespots which make this possible.
Other interesting VNO statistic included that video surveillance alone will take up 2% of the internet by 2022, and that CDNs will move from 75 EB a month today (50 EB during 2017) to 250 EB a month by 2022. Again, much of that is video, but not all.
What Ericsson has done is calculate the effect of moving from one video format to another, by compiling the data for the graph here, which shows just how heavy 4K and 8K video is for broadband delivery.