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Internet traffic and
service forecasts, 2010-
2015
Giles
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Cottle,
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Informasubtitle
Telecomsstyle& Media
April 4th 2011

11/09/2009
04/04/2011
Today’s presentation showcases findings from Informa’s
first quantitative study of Internet traffic & services

• Congestion Up Ahead? Internet traffic and

service forecasts, 2010-2015
• Research covering:
– Internet service usage (eg – how many people
use internet video? How many casual games
were played?)
– Internet service traffic (eg – how much traffic do
all these Internet activities generate?)
• Unrivalled coverage:
– Users, usage and traffic for 20 service categories
across 8 regions and 13 countries
– Revenues for 9 service categories
• Deliverables:
– PDF report featuring data/topic/country analysis
– Executive summary, in PowerPoint
– Interactive forecasting tool, in Excel
Internet traffic will grow ten-fold between now
and 2015 • By 2015, global
Internet traffic will
be 1.2 million
petabytes in size,
around seven
times larger than it
is today
• At 47% year on
year, growth will
be significant, but
far smaller than
some of the more
outlandish
predictions made
in the past
•Methodological note: Informa’s Internet traffic forecasts include business and
consumer unmanaged Internet traffic, and includes up- and download traffic.
This applies to all data/charts in this chart, and others in this slide deck
Video will dominate, but today, it does not (yet)
• In 2010, peer-to- Internet traffic, 2010-2015 (pb)
1,400,000,000
peer and online
video were neck- 1,200,000,000

and-neck in terms 1,000,000,000

Other
of traffic
Web Browsing/Data
• In 2011, video will 800,000,000
Online storage/back-up
overtake peer-to- 600,000,000 Online Video - Video to TV

peer; by 2015, it Online Video - SD

400,000,000 P2P filesharing
will account for
Online Video - High Definition
over 50% of all 200,000,000

Internet traffic
-
2010 2011 2012 2013 2014 2015

• Traffic is, and will remain, essentially dominated by four types of service: video,
web browsing, p2p and storage/back-up

• By 2015, all of these services will still have a significant share of traffic
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Asia, not North America, will be the dominant
region by Internet traffic

•Much of the Internet traffic and service hype, in the Western world at least,
focuses on the US
•But it is Asia that is the larger Internet region, by traffic
•By 2015, this will have increased, by virtue of the sheer growth in user numbers
this region will see over the forecast period
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Traffic will vary hugely by region
North America – traffic by service type, 2015

•Huge amount of video traffic, including video to TV

•Communications services barely make an impact on global traffic
•Peer-to-peer file-sharing shrinks to below 5% of total traffic
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Traffic will vary hugely by market
Latin America– traffic by service type, 2015

•Peer-to-peer still accounts for over 40% of traffic

•Communications services take much more share than the global average
•Online storage accounts for almost 20% of traffic
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In 2010, every month, an average internet user will..

Up/download 3
files via peer to Send 87 instant
peer messages

View 1,396 web Make/receive 10

pages VoIP calls

Stream 11 music
Watch 96 videos
tracks

Send/read 166 Play online games

emails for 8 hours

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©Confidential
In 2015, every month, an average internet user will..

Up/download 6
files via peer to Send 107 instant
peer messages

View 1,556 web Make/receive 18

pages VoIP calls

Stream 27 music
Watch 195 videos
tracks

Send/read 153 Play online games

emails for 9 hours

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Despite massive traffic growth, a significant proportion of
users will watch only SD video in 2015

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The evolution of video traffic
• Today, the majority of global video traffic is still standard definition content
• By 2015, more SD streams will still be consumed than HD streams – but HD
traffic will outnumber SD traffic for the first time

Internet video traffic, 2010-2015 • Video to the TV

will grow
significantly,
particularly
towards the end of
the forecast period
• Yet it will still only
account for under
20% of video
traffic globally,
although this
figure will vary
drastically by
market
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©Confidential
Despite low video share, still 380m video to TV
users by 2015
380 million video to TV viewers globally in 2015
By 2015, 50% of internet users in the USA and UK will watch online video via
a connected home device

60.0%
Selected markets, video to the TV penetration of internet users, 2010-
50.0% 2015

USA
40.0%
Japan
France
30.0%
Germany
Italy
20.0%
Spain
UK
10.0%

0.0%
2010 2011 2012 2013 2014 2015

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Best newcomer: online storage
• Apart from online video,
online storage will be the
fastest growing service
• Two big drivers
– Sites most widely associated
with (but not exclusively used
for) piracy – Rapidshare,
Megaupload
– Increasingly, automatic back-
up services like Dropbox
• Perhaps of all services,
online storage will be the
one that benefits most from
increased bandwidth,
particularly in the uplink

www.informatm.com 04/04/2011 14
©Confidential
Online gaming – one size does not fit all..
• A $15bn market by 2015
• Little traffic (but cloud gaming could change that)
• Each of the world’s major markets has extremely distinctive online gaming
traits:
– US: Consoles, particularly Xbox Live,
dominate; world’s leading DTO PC market
Total Revenues (Millions $US pa) North America
due almost solely to the popularity of the
Steam service 7000
Latin America
– Germany: Casual gaming immensely
6000
popular due to local players such as
Asia-Pacific
Bigpoint, Gamesforge 5000 Developed

– China: Free-to-play social games and

4000 Asia-Pacific
online play titles are phenomenally popular Developing

– Korea: Local providers rule; PC the 3000

Western Europe
dominant platform partly due to ban on
2000
import of consoles during the 1990s
Eastern Europe
– Japan: PC gaming is a marginal activity; 1000
portable gaming dominates. Online play in
0 Africa/Middle
general is very low; unlike Korea, Internet East
2010 2011 2012 2013 2014 2015
cafe culture is not gaming-based

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©Confidential
Peer to peer traffic will grow, but almost
exclusively in Asia
• Globally, the average global Internet user will share twice as many files via peer-
to-peer in 2015 as they do today.
• This will be driven almost exclusively by new users in Developing Asia Pacific
• During the forecast Peer-to-peer traffic, 2010-2015
period Informa
expects a major
transition from
physical, disc-based
piracy to online piracy
in the region
• This will also be
fuelled by a lack of
legitimate online
content services in
many markets

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©Confidential
Drivers for traffic growth: bandwidth is but one
factor of many
• Korea and Japan both enjoy the fastest broadband speeds in the world, but
their Internet consumption is very difficult
• Korea is the country with the highest usage in the world; on a per-head basis,
Japan usage is lower than Spain and Italy.
• In Japan, the most popular perceived benefit of high-speed FTTH is cheap VoIP
• While end-user bandwidth is a factor in determining traffic, it is but one factor
and, as is the case here, it is not the determining factor.

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©Confidential
Why such a big difference between Japan and
Korea?
• Mobile:
– The mobile Internet is far more developed in
Japan than Korea. Many of the most popular
“web” services (eg Mobage Town) are in fact
mobile only
• Backhaul
– Backhaul in Japan is expensive; online video
quality is typically lower than in the
US/Europe; few premium free services exist.
By contrast, Pandora, one of Korea’s leading
video sites, has offered 1080 HD since 2008
• Piracy
– Piracy in Japan is far lower than in Korea,
where users acquiring content via online
storage sites is a mainstream activity
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China-huge growth in a lower bandwidth market
• China punches well above its weight, China, Internet traffic, 2010-2015
traffic-wise, in proportion to Internet (petabytes/year)
speeds, for several reasons: 300,000

• While overall speeds may be slow, 250,000

FTTH/B connections are being rolled out 200,000

in Shanghai/Beijing/Guangzhou, where 150,000

usage is greatest 100,000

• Online video: Lots of service innovation- 50,000

-
local players, heavily backed by VC 2010 2011 2012 2013 2014 2015
money (Tudou, Youku), have acquired
popular local and international content
• Peer to peer: Usage is ingrained within
Chinese Internet users. Some big
legitimate content providers even use
peer-to-peer networks as a distribution
method to reach as large an audience
as possible
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Legislation is likely to have only a minor effect
on traffic
• In a few cases, legislation against anti-
piracy may have some impact on traffic France, proportion of users downloaded
– New anti-piracy laws may have had an pirated content, 2010
18
impact on traffic in Japan in 2010
• But in most cases, it will cause only a 16

temporary downward trend, if any at all: 14

– In France, only a few users stopped using 12

peer-to-peer after the Hadopi law was 10
passed; most of these simply used other %
Before Hapodi
8
pirate sites After Hapodi
6
– In the wake of the passing of iPred in
Sweden, peer-to-peer traffic dropped slightly, 4
only to rise again afterwards 2
• There are plenty of ways in which users can 0
use peer-to-peer without detection eg IP P2P pirates penetration Non-P2P pirates
(%) penetration (%)
masking, VPN usage
Source: M@rsouin, CREM, Université de
• The big impact legislation will have will be Rennes
changing the way that people illegally
acquire content
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Caps will become more of an issue when they hit
“mainstream” users
• Today, broadband caps
Speed Avg
Country Operator Tariff
(Mbps)
Monthly Cap
usage/month
are hitting only the
(GB)
(GB) heaviest users in most
BigPond Elite markets
Australia Telstra 2GB Liberty 30 2 9.14*
TriB 1199 • Based on anecdotal
India MTNL combo 10 2 3.24 evidence Informa believes
eLife Triple Play
UAE Etisalat Starter 1 6 2.35* Canada, Australia and
BT Total New Zealand are markets
UK BT Broadband 8 10 13.06
where “mainstream”
Canada Bell Performance 6 25 16.02 network usage is affected
Stofa Flexrate by caps
Denmark Stofa 4.096/384 4 50 10.91*
NET Virtua • Today, the majority of
Mega Flash 20
Brazil Net Mega 20 100 4.61
users that will be restricted
*Regional average by a broadband cap will be
Source: Informa Telecoms & Media heavy peer-to-peer users
• In future caps will become much more of an issue when “mainstream” users are able to
exceed their allowances via activities such as online video or online back-up services. This
will force some operators to re-think their capping strategy, and to re-think their definition
of a bandwidth hog
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©Confidential
Lots of traffic growth will be “passive”

• Lots of traffic growth is down not to consumer choice but factors they
don’t play a role in. For example:
• VoIP:
– Many users don’t even realise they are using VoIP (when provided by their ISP)
– Most service providers use adaptive bitrate technology – so as a user’s connection
speed increases, so the amount of traffic their VoIP session takes will increase, as the
service adapts to the increased bandwidth
• Peer-to-peer – a “greedy” protocol that is directly impacted on available
bandwidth
• Video – HD video will only truly take off when it is provided as a default
by companies, not when users have to opt-in to watch HD
• Service providers themselves have a direct and measurable impact in
how traffic grows

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©Confidential
Mobile will be additive rather than cannibalizing
• Despite the hype surrounding fixed to mobile substitution, mobile Internet usage
is likely to be additive to fixed network usage, rather than cannibalistic.
• Mobile devices are likely to become more popular as devices for browsing,
music streaming and messaging, but most in-home traffic will be via Wi-Fi
networks
• Informa does not
Fixed and mobile Internet traffic, 2010-2014
expect video viewing
900,000 100.0%
800,000
via mobile handsets to
700,000
be significant during
75.0%
600,000 the forecast period due
500,000 to problems with
50.0%
400,000 networks, device size,
300,000 rights and
25.0%
200,000 monetization.
100,000
• By 2014, mobile will
- 0.0%
2010 2011 2012 2013 2014
still be less than 2% of
Fixed traffic Mobile traffic Mobile share of total traffic
total Internet traffic

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©Confidential
Thank you!
For
questions/comments/
enquiries

Giles Cottle
Senior Analyst, Broadband & Internet
giles.cottle@informa.com
+44 (0)20 3377 3345
http://twitter.com/gilescottle
http://uk.linkedin.com/in/gilescottle

Report link:
www.informatm.com/internettraffic

04/04/2011