June 9, 2016 Leave a Comment
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SP360: Service Provider

Boom! Five Applications that Showed Explosive Growth in 2015

We’re always on the lookout for the next big application to drive Internet traffic. When we see a type of traffic almost doubling in a year, we put it on our watch list. Below are five that topped our watch list based on the most recent Cisco Visual Networking Index (VNI) Complete Forecast.

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  1. VIRTUAL REALITY (VR) TRAFFIC QUADRUPLED IN 2015

Virtual reality has come of age. Head-mounted displays are now affordable and provide compelling immersive experiences to consumers. Though content availability is still limited, global VR traffic more than quadrupled in 2015, from 4 Petabytes per month in 2014, to 18 Petabytes per month in 2015.

Will VR become more than a niche application? We believe it will, but we do not expect VR to be mainstream before 2020. Even with VR traffic multiplying 61-fold by 2020, it will still remain less than 1% of total Internet traffic. Content availability will be one barrier to growth. VR is very different from linear media, and it will take the entertainment industry time to transform. Gaming is the industry most ready to develop content for VR hardware, and will be the first to yield substantial traffic.

  1. VIDEO SURVEILLANCE TRAFFIC GREW 90%

Home video surveillance traffic took off last year, increasing 90%. The combination of new cameras and cloud-based services allows users to access a live streaming video of their home from anywhere. Internet video surveillance traffic nearly doubled in 2015, from 272 Petabytes per month in 2014 to 516 Petabytes per month in 2015.

The implications for Internet access providers are profound. Home video surveillance increases a home’s upstream traffic dramatically, and the volumes are high because video is uploaded continuously to the cloud, regardless of how frequently or infrequently a user actually looks at the video feed. Service providers are concerned about this type of “vampire bandwidth” effect, analogous to vampire electricity. At high-resolution, a video camera can upload as much as 60 Gb per month, more than the average household’s total Internet traffic today (49 GB/mo).

Internet video surveillance traffic will increase 10-fold between 2015 and 2020. Globally, 4 percent of all Internet video traffic will be due to video surveillance by 2020, up from 1.5 percent in 2015.

  1. SMARTPHONE TRAFFIC GREW 86%

Smartphones accounted for only 8 percent of total IP traffic in 2015, but experienced a growth rate much higher than most other device categories. Not all this traffic crossed mobile networks – in fact, the majority of smartphone traffic is offloaded to Wi-Fi. We expect smartphones to continue this fast pace of growth, with smartphone traffic exceeding PC traffic by 2020. Such a conclusion would have been unimaginable 10 years ago.

  1. HOUSEHOLDS EXCEEDING 500 GB PER MONTH GREW 76%

The number of Internet households exceeding 500 GB grew from 5.8 million to over 10.2 million in 2015. The increasing availability of online video content has made it possible for “cord-cutting” households to opt to receive video content exclusively through online video providers rather than through cable or satellite. These households consume a large volume of data each month, and we believe cord-cutting is one reason behind the growth of households exceeding the 500 GB benchmark. For the first time, we’ve seen significant numbers of users encountering fair-usage limits on the fixed side, and in response we’ve seen a number of service providers increase those limits. In general, fixed limits are still more generous relative to average usage than mobile limits.

  1. INTERNET GAMING TRAFFIC GREW 67%

Now that there is a good supply of on-board storage on gaming consoles, gamers are downloading files rather than using discs. Due to file downloads, Internet gaming traffic grew 67% in 2015 and will grow 7-fold from 2015 to 2020. Globally, Internet gaming traffic will be 4 percent of consumer Internet traffic in 2020, up from 2 percent in 2015.

The download of game files often occurs during peak hours. If this continues to be the case, perhaps we will see partnerships between content providers and network providers to manage download times and avoid congestion.

A LOOK AT THE FUTURE

Will these applications rise beyond “watch list” status and transform the composition of Internet traffic? We hope you will let us know what you think as you review the complete VNI study. Also, please join us for our webcast on June 14!

VNI Forecast Resources: