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

How much bandwidth will consumers demand over the next decade? 2

Incoming traffic volume at the AMS-IX 10.000.000 TB per month 1.000.000 100.000 10.000 Year Predicted (CAGR=40,2% over the period 2007-2017) Average incoming traffic volume per month (TB) 3

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Forecasted growth of aggregate traffic volume 31,0 Traffic volume compared to 2013 26,0 21,0 16,0 11,0 6,0 1,0 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 Downstream (CAGR=41,5%) Upstream (CAGR=44,9%) 7

Forecasted development of the average sufficient provisioned speed 450 Provisioned speed (Mbit/s) 400 350 300 250 200 150 100 50 0 2016 2017 2018 2019 2020 2021 2022 Year Downstream (CAGR: 40,5%) Upstream (CAGR: 44,1%) 8

Up vs. down 45% 40% Upstream / downstream 35% 30% traffic 25% 20% 15% 10% 5% 0% 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 9

What is generating this demand at the consumer side? 10

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

Forecasted downstream traffic demand by service category 18.000 Downstream demand (Mbyte/day) 16.000 14.000 12.000 10.000 8.000 6.000 4.000 2.000 - 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 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 12

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? 13

Volume demand per service = Adoption Intensity Quality “n/N people watch X hours of Netflix per day at full-HD resolution ” 14

The differences between user groups are huge 15

There are huge differences between user groups 100% 90% % of total daily upstream traffic volume 80% 70% 60% 50% 40% 30% 20% 10% 0% 0% 20% 40% 60% 80% 100% Users (from high to low daily upstream traffic volume) 16

Estimated downstream demand growth per user group 1.000.000 Average traffic per subscription 100.000 10.000 (Mbyte/day) 1.000 100 10 1 2014 2015 2016 2017 2018 2019 2020 2021 2022 Year Power users Innovators Mainstream users Laggards 17

Broadband demand is driven by technological trade-offs. 18

Fundamental trade-off in ICT Store Cache or recompute? Stream or download? Centralize or decentralize? Compute Transmit 19

Fundamental trade-off in ICT Store Cost Compactness Performance Coverage/availability Latency Jitter … Compute Transmit 20

Cheaper Faster More compact Price per GB ($) GB/inch 2 Latency (ms) 1000000 10 2 10 3 10000 Storage 100 1 0,01 10 10- 6 1980 2000 1955 1975 1995 2015 1990 2000 2010 Cost of a processor cycle ($) Processor speed (MHz) # Transistors / processor 10 -8 10 6 10 10 Processing 10 3 10 -19 10 1970 1990 2010 1975 1995 2015 1975 1995 2015 Download speed (bps) Price per Mbps ($) Spectral efficiency (bits/Hz/site) 10 4 10 9 10 2 Transmission 10 -1 10 10 -3 1980 2000 1970 1980 1990 2000 2010 2020 1998 2008 21

Fundamental trade-off Store Fixed Wireless Compute Transmit 22

There is future demand but we do not yet know what will drive it 23

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Supply growth (connectivity) Residual? Demand growth explained by existing service categories Adoption growth Quality growth Usage intensity growth Time 25

ITS Seoul 2018 Session B1 Monday (25-6) 15:10 – 16:35 KU Media Hall OR: dialogic.nl/ufbb 26

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 27