Friday I reviewed the finding that there will be over 1 Billion LTE users by 2017 as reported in Ericsson’s Traffic and Market Report. The same report includes analysis that expects mobile data traffic to grow by 15 times over the next five years. This is explosive growth for sure. The research also allows us to compare this data point against the current gold standard of mobile data traffic estimates: Cisco’s Visual Networking Index (VNI).
Cisco’s forecast only projects through 2016 so we will use that as our baseline. The chart at the left depicts global mobile data traffic produced by mobile PCs, tablets and smartphones and voice traffic to reach approximately 6 Exabytes per month by 2016. By contrast, Cisco’s VNI predicts 10EB monthly in 2016. That is a large variance.
Why is Cisco More Optimistic?
Before we tear down Cisco for taking optimistic assumptions it is worth noting two points. First, Ericsson has at least as much desire for more mobile data traffic as Cisco. Both companies provide core data transport layer infrastructure that will be needed as data traffic rises. Second, Cisco’s prediction for 2011 data traffic was spot on at around 0.6EB per month which also closely correlated with Ericsson’s estimates for actual use at the end of the year. Cisco also had to update its estimate for 2012 by 8% based on more aggressive trends.
Mobile Video is Driver
While their numbers differ on total forecasted traffic and the data variation between smartphones and mobile PCs, both companies agree that video is the biggest driver. Cisco reported last year that video for the first time surpassed 50% of all mobile data traffic. Cisco also notes that Cloud is the key enabler here:
Mobile devices have memory and speed limitations that might prevent them from acting as media consumption devices, were it not for cloud applications and services. Cloud applications and services such as Netflix, YouTube, Pandora, and Spotify allow mobile users to overcome the memory capacity and processing power limitations of mobile devices.
Implication for the Enterprise
Global Mobile data traffic growth has a direct impact on the enterprise. While a good deal of the forecasted growth will be driven by consumer access to video, these same trends are now showing up in the enterprise. The shift from BlackBerrys to iPhones and Androids with a smattering of tablets is going to drive rapid mobile data traffic growth from corporate users. This growth will show up in two areas:
- WiFi Traffic
- Mobile Data Plan Costs
While the Ericsson and Cisco reports are focused on data traffic over traditional mobile cellular networks, there is clearly a correlation between mobile data traffic and the growth in data traffic on WiFi networks generated by smartphones and tablets. Cisco estimates that offload from mobile cellular to WiFi will grow from 11% in 2011 to 22% in 2016. That is 22% of a much larger base and will represent over 3EB per month compared to just 72 petabytes today. Some of that offload will surely go onto consumer WiFi networks, but you can be sure a great deal will also wind up on corporate WiFi as employees seek to conserve capacity on their monthly data plans while at work. This means enterprises will have a rapidly increasing need for WiFi capacity over the next five years.
Mobile Data Plans
Mobile Data plan costs are the next obvious point of impact. Telecom expense management will be shifting more to data plans from voice. With Verizon ending its unlimited data plans last year and this year its grandfathering of existing unlimited data plans when users upgrade, mobile data traffic variability and overages will be every organization’s problem. Many BYOD programs hope to shift the total mobile cost onto employees, but that is sure to meet resistance and lead to some negative impacts for employers. You can imagine employees will avoid conducting business on their mobile devices if they are close to their monthly data limits. Not exactly the productivity enhancer we all are expecting. Employees will also likely shift as much traffic as possible to corporate WiFi as mentioned above. Either way, the corporation is going to feel a direct cost impact.
How do you think mobile data growth will impact the enterprise? Comment below.