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About this report . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Conservative or disruptive? . . . . . . . . . . . . . . . . . . . . . . . .
11
16
22
23
Appendix B: Methodology . . . . . . . . . . . . . . . . . . . . . . . . . .
24
Marcus Weldon
President of Nokia Bell Labs
Importantly, we conclude
that with 3G, 4G/Long Term
Evolution (LTE) and small cells
alone, operators will not be able
to profitably address even half
of the demand left untouched
by Wi-Fi-like technologies.
The current cost to deliver a megabyte of data is
inconsistent with the demand and willingness/ability
to pay. Balancing this equation will require faster
adoption of new technologies, such as SDN, network
function virtualization (NFV) and new wireless network
technologies and solutions (for example, 5G), as well
as new business models that support new revenue
generation.
Mobile technologies
2G
3G
4G/LTE
While newer technologies such as 5G are emerging and
some operators are planning early deployments in the
2018 timeframe, widespread adoption is not expected
to occur before 2020, after the first standards are set.
Streaming
Audio (for example, Apple Music, Spotify)
Video (for example, Netflix, Amazon Prime,
YouTube, Livestream)
Personal video sharing (for example, Periscope,
Vine, GoPro)
Key insights
Consumption demand for streaming media will grow
17 times from 2014 levels, accounting for 71 percent
of the total bandwidth demand by 2020.
Most streaming (6674 percent) will be homebased, driven by more content and larger and higher
resolution devices, with video streaming representing
the lions share at 4357 percent of the total
streaming demand.
Computing
Gaming
Key insights
Computing demand comes from cloud-based
applications and native apps on mobile devices.
In 2014, end-device apps accounted for about
84 percent of computing demand. By 2020, this
percentage will shift downwards as cloud-based
applications grow from 16 percent to 45 percent
of the total computing demand to allow for the
creation of richer and more contextual experiences.
Generation X and millennial young adults account
for 82 percent of demand, with millennial young
adults being heavier users.
Small devices generate slightly more demand in
total than medium-sized devices for computing
applications.
Medium-sized devices generate roughly 90 percent
of the demand for cloud processing.
Communicating
Voice (for example, voice over Internet Protocol [VoIP]
and voice-based conferencing)
Video (for example, video calls, mixed video/voice
conferences, large-screen video conferencing)
Storing
Figure 1. Daily traffic distribution for the five primary categories of mobile applications
% daily trac
Gaming
peak
12%
10%
Storing
peak
8%
Communicating
peak
Computing
peak
Streaming
peak
6%
4%
2%
12 AM
2 AM
4 AM
6 AM
8 AM
10 AM
12 PM
2 PM
4 PM
6 PM
8 PM
10 PM
10
Conservative
or disruptive?
China
Emerging Asia/
Middle East
and Africa
(EA/MEA)
Latin
America
(LA)
Developed
Asia-Pacific
(DAP)
Figure 2. Global wireless data demand growth conservative versus disruptive trajectories
Daily demand [exabytes]
12.0
EA/MEA 64x
Disruptive
Conservative
98x
China 26x
10.0
DAP 21x
45x
8.0
41x
32x
LA 50x
76x
CEE 36x
6.0
WE 21x
30x
4.0
NA 17x
53x
31x
26x
2.0
2014
2015
2016
2017
2018
2019
2020
11
Emerging Asia/
Middle East
and Africa
(EA/MEA)
Latin
America
(LA)
Developed
Asia-Pacific
(DAP)
14%
22%
0.26 EB
21%
2.0x
1.5x
15%
16%
6%
NA
1.0x
6%
0.5x
13%
29%
2015
2016
2017
2018
2019
2020
10%
7.80 EB
8%
11%
18%
11%
12
Emerging Asia/
Middle East
and Africa
(EA/MEA)
Latin
America
(LA)
Developed
Asia-Pacific
(DAP)
NA
WE
CEE
LA
Population
1.1x
1.0x
1.0x
1.1x
1.0x
1.0x
1.1x
1.2x
1.5x
1.6x
1.8x
1.3x
1.7x
2.0x
13.7x
14.3x
22.0x
27.5x
16.3x
15.0x
32.6x
DAP
China
EA/MEA
87.3 DAP
80
72.1 NA
60
40
20
21.1 EA/MEA
2014
2015
2016
2017
2018
2019
2020
13
Angle on applications:
streaming will dominate
Streaming
dominates
in 2020
6-year growth
(Big Apps)
8.0
46x
Storing
7.0
38x
Communicating
6.0
45x
Gaming
Computing
5.0
10x
Video applications
will contribute
56% of total
demand
33x
Streaming
4.0
30x
3.0
2.0
1.0
2014
2015
2016
2017
2018
2019
2020
14
28x
40
30
20
12x
10
41x
22x
2014
2015
2016
2017
2018
2019
2020
Disruptive
Conservative
70x
6
4
50x
2014
2015
2016
2017
2018
2019
2020
135x
6
5
4
3
5x
2
1
16x
2014
2015
2016
2017
2018
2019
2020
* Source: The Future X Network: A Nokia Bell Labs Perspective, Weldon, 2015
15
Demand
7.0
Opportunity for
mobile network
operators by region
6.0
EA/MEA 46%
China 31%
DAP 26%
5.0
LA 29%
4.0
CEE 33%
3.0
WE 23%
2.0
NA 23%
Wi-Fi
1.0
2014
2015
2016
2017
2018
2019
2020
16
Figure 9. Currently planned technologies and strategies can only partially address the opportunity gap
Exabytes per day
9.0
8.0
Demand
7.0
1.47
Unmet demand!
0.17
New technologies +
alternate business models
0.93
6.0
5.0
4.0
3.0
Wi-Fi
2.0
1.0
2014
2015
2016
2017
2018
2019
2020
17
Figure 10. New technologies rapidly push down the cost curve
Cost per GB [NA]
LTE
$14
$12
Devices
36%
Trac
80%
$11.44
$10
LTE
Devices
58%
Trac
88%
LTE
$8
Devices
79%
Trac
97%
Small cells
$6
$4
SDN/NFV
$2
$1.35
5G, LTE-U
$0
2014
2015
2016
2017
2018
2019
2020
2020 average
GB/month [cumulative]
Growth relative
to 2014
2G/3G
0.5
1.4x
4G
4.8
4.3x
Small cells
8.6
6.8x
New technologies*
12.8
10.5x
Alternate models
14.5
12.0x
18
Emerging Asia/
Middle East
and Africa
(EA/MEA)
Latin
America
(LA)
Developed
Asia-Pacific
(DAP)
Figure 11. Profitable cellular consumption per data capable device [GB/month]
14.5 NA
14
12
10.2 DAP
10
2014
2015
2016
2017
2018
2019
6.1
China
4.8
WE, CEE
4.0
LA
2.1
EA/MEA
2020
19
In the preceding analysis we have focused on usergenerated traffic. However, as mentioned previously IoT
brings a host of other challenges. With the sheer ubiquity
and volume of IoT devices, contention for finite control
plane network resources will be extreme, impacting
other human-critical services. As a contrast to human
communications, collaboration and content delivery
applications, different IoT applications have different
traffic profiles and also do not necessarily follow human
diurnal cycles. IoT applications also have highly diverse
requirements in terms of network connectivity, reliability,
security, latency, data rate, mobility and battery life.
These requirements must also be met at extremely lost
cost per bit, due to the lower value per bit (for example,
to communicate an on/off state for a thing) than
for a typical (human) cellular connection.
To address the cellular (wide area network) IoT
requirements, multiple generations of wireless
technologies will likely be utilized to support the lower
cost, extended coverage and improved battery life for
end devices. Although legacy cellular technologies,
such as 2G, are not highly data efficient, they are
ubiquitous and can economically support the lower
data rates of simple devices. Even though operators are
likely to rapidly move to 4G/LTE and the attendant IoT
Figure 12. High adoption of 4G/LTE M2M devices but 2G will stay
Cellular M2M technology penetration
100%
4G
80%
60%
3G
40%
20%
2G
2014
2015
2016
2017
2018
2019
2020
20
21
22
Edge
cloud
Optimized
metro/core
SDVPN
People
and things
Long
wires
Short
wireless
Network
function virtualization
Appendix A: Regions
with country listings
Central and Eastern Europe (CEE)
Western
Europe
(WE)
North
America
(NA)
China
Latin
America
(LA)
Emerging Asia/
Middle East
and Africa
(EA/MEA)
Developed
Asia-Pacific
(DAP)
China
23
Appendix B: Methodology
Nokia Bell Labs mobile forecast methodology is based on a two-step approach. Initially, we estimate the end-users
desire or need to consume wireless data and then apply operators supply side constraints to come up with a forecast
of mobile data traffic. This decoupling of the demand drivers from operators supply options allows for two things:
first, the examination of how end-user demand for data will evolve as a function of individual needs and preferences,
device evolution, applications and macro-economic factors; and second, how supply side constraints and network
evolution strategies impact operators ability to profitably support the given demand. The following diagram provides
a brief overview of the methodology and data source linkages.
Devices
Macro trends
Rich media
Tablets
Social networking
Cloud services
Subs
Market reports,
other data sources
Data collection
and processing
Technology, usage
and device trends
Macro forecast
parameters
Forecast constrained
by protability
Macro Forecast
DB/Inputs
Mkt Characteristics
# mobile subs,
Connected Devices
Big 5 Apps
BH Profiles
Big 5 Module
Model/Engine
Forecast
Market profile
Place of use
Sub-app Users
Quality
Avg Mins/sub/day, or
SD
Kids/Teens 1-17
Mid/Parents 30-54
Hourly probability
Throughput
Mbps
3D/UHD
GB/day
HD
# session*length,
UL/DL
Offloading Prob
transit
Day/work/school
Sub-app Usage
Concurrency Factor
home
24 hr usage profile
Addressable Users
BigApp BH profile
Sub-applications
Wireless Technology
Output
Device
Total Usage
MB
#/% subs
Bandwidth by sub-app
Usage/volumes
Featurephone
Tech/Coding
Smartphone
Efficiency assumptions
Country
demographics
% Latency tolerant
9.0
MB
User Segm BW
7.0
6.0
5.0
4.0
8.0
6 year growth
(Big apps)
8.0
Tablet
PC/TV
Mature >54
Specific take rates,
concurrency, future use..
Consumption desire
45X
5.0
10X
0.17
4.0
33X
Streaming
2.0
2.0
1.0
1.0
2015
2016
2017
2018
2019
Demand forecast
comScore
Nielsen
eMarketer
Strategy Analytics
Machina Research
Overlaid on these sources are Nokia Bell Labs proprietary models: time of day behavior,
application evolution, technology evolution, user behavior, and machine-to-machine
device/application characterization.
For information about Bell Labs Consulting, please visit:
www.bell-labs.nokia.com/consulting
www.nokia.com Nokia is a registered trademark of Nokia Corporation. Other product and company names
mentioned herein may be trademarks or trade names of their respective owners. PR1603018674EN (April)
Nokia 2016
0.93
3.0
3.0
2014
1.47
6.0
38X
Gaming
Computing
7.0
46X
Storing
Communicating
2020
2014
Unmet
demand
New technologies
and alternate
business models
3G + LTE and
small cells
Wi-Fi
2015
2016
2017
2018
2019
2020