Top 5 Surprises from the 2017 Mobile VNI Study

We recently released the annual update of the Cisco Mobile Visual Networking Index, 2016-2021. Mobile continues to be a highly dynamic space, with robust growth, and there are always a few surprises lurking in the numbers. I’d like to highlight a few of the numbers that struck me as particularly impressive this year.

1. Mobile will approach 20% of total fixed and mobile IP traffic by 2021

Five years ago, mobile connections generated less than 2 percent of the world’s total IP traffic. In 2016, mobile was 8 percent, and by 2021 mobile will account for an eye-opening 20 percent of total IP traffic. Global mobile data traffic will increase sevenfold between 2016 and 2021, with a compound annual growth rate (CAGR) of 47 percent. The volume of mobile data traffic will reach 49 exabytes per month by 2021, and will have an annual run rate of over half a zettabyte. We expect mobile to continue to grow twice as fast as fixed, and mobile’s traffic share will continue to increase.

2. Smartphones will be responsible for 48% of all fixed and mobile traffic by 2021

Not all traffic on smartphones and other mobile-connected devices crosses the network. Much of it is offloaded onto home or public fixed (usually Wi-Fi) networks. We estimate that in 2016, more traffic was offloaded onto fixed networks than remained on mobile networks. 60 percent was offloaded in 2016 and by 2021 we expect 63 percent to be offloaded in this way.

If we consider the high volume of offload together with the fact that over 80 percent of traffic is generated by smartphones, we find that over 48% of total IP traffic will be due to smartphones by 2021.

This is an astounding trend, particularly considering how prominently PC traffic has always figured in IP traffic. In 2011, PCs generated 94 percent of total IP traffic. In 2021, PCs will be less than 30 percent of total IP traffic, and smartphones will be the device category with the highest share at 48 percent.

3. Starting in 2019, more “things” will be added to mobile networks each year than devices

This year, 328 million “things” will be added to mobile networks, while a substantially higher number (512 million) of smartphones, tablets, and PCs will be added. The balance will shift starting in 2019, when Internet of Things (IoT) connections will account for more mobile additions than smartphones, tablets, and PCs. And by 2021, 638 million IoT modules will be added, while smartphone, tablet and PC additions will reach 381 million.

4. 5G will generate 1.5% of traffic by 2021

By 2021, 5G will still have a very modest share of mobile connections – 0.2 percent, or 25 million. However, each 5G connection will generate nearly 30 gigabytes per month per connection in 2021, an amount that is 4.7 times higher than the average 4G connection. In aggregate, 5G will represent 1.5 percent of total traffic by 2021 despite the low connection share.

For more details see Shruti Jain’s blog on our estimates and her assessment of the role 5G in future mobile networks, also published today.

5. Traffic “wants to be mobile”– but cellular capacity constraints ensure ongoing need for Wi-Fi.

It appears that when mobile pricing conditions are right, traffic will migrate back onto cellular networks from Wi-Fi, even when Wi-Fi might be available. In Korea, unlimited plans led to an acceleration of mobile traffic and a deceleration of mobile offload onto Wi-Fi. The surprise here is that this “reverse migration” occurred despite the fact that Wi-Fi is highly available in Korea both in the home and in public locations. Likewise, there were examples of reverse migration in the US with Sprint reporting a decrease in offload rates, and with a number of sports stadiums experiencing more mobile than Wi-Fi traffic for the first time in several years. At sports stadiums, the drivers of mobile were the increase in mobile quality and speeds associated with 4G. For Sprint, the driver of decreased Wi-Fi was the availability of unlimited data plans.

A corollary of reverse migration may be that when pricing allows, heavy users want to be mobile, too. While generally the top 1 percent of users have been heavily curbed by data caps (the top 1 percent of mobile data subscribers generated 6 percent of mobile data traffic, down from 52 percent in 2010), there is anecdotal evidence that with unlimited plans the balance of traffic shifts back to the heavy users.

Despite the traffic’s desire to go mobile, however, we expect reverse migration to continue to happen in isolated pockets and instances rather than becoming a global phenomenon. The limited availability and high expense of spectrum is a constraint that will not allow the majority of mobile operators to offer unlimited plans.

6. And much more!

Though these trends are straightforward extensions of trends seen in previous years, mobile networks continue to hit milestones in terms of video, speed, and average usage.

• More than three-fourths of the world’s mobile data traffic will be video by 2021. Mobile video will increase 9-fold between 2016 and 2021, accounting for 78 percent of total mobile data traffic by the end of the forecast period.

• Mobile network connection speeds will increase threefold by 2021. The average mobile network connection speed (6.8 Mbps in 2016) will reach 20.4 Mbps by 2021.

• The average smartphone will generate 6.8 GB of traffic per month by 2021, a fourfold increase over the 2016 average of 1.6 GB per month. By 2021, aggregate smartphone traffic will be seven times greater than it is today, with a CAGR of 48 percent.

To see all of our Mobile VNI Forecast resources and online tools, please visit our public web site.