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Demand for mobile broadband

by: John Leibovitz & Robert Alderfer

February 10, 2011

Cisco recently released an update to its Visual Networking Index: Mobile Data Traffic Forecast report, which contains projections of data usage on mobile wireless networks over the next five years. The report is widely followed because Cisco’s role as a network equipment supplier throughout the network ecosystem – including wireline networks, cellular networks, and consumer WiFi networks – gives them some unique insights into where network trends are heading. Last year’s VNI report, which projected surging demand on wireless networks, was an input into the spectrum demand analysis we released this past fall. We were therefore interested to see how Cisco’s report changed since the prior edition.

The bottom line is that Cisco continues to foresee an enormous surge in wireless demand. Let’s take a look at their North American regional breakout. Cisco estimates that in 2010, North Americans transmitted 49 Petabytes (PB)per month over mobile networks. That’s about 4,900 times the amount of information in the printed collection of the Library of Congress. By 2015, Cisco expects this number will grow to 986 Petabytes – nearly one Exabyte, equivalent to almost 100,000 Libraries of Congress.

In relative terms, Cisco’s projects 20X growth in the next five years. This is lower than the 47X growth forecast in the previous Cisco report, but only because this year’s forecast starts from a higher “base” compared to the previous year. Overall, Cisco predicts that data growth begins to slow down in out years, but that the growth still continues at an impressive rate. The forecast consumption is 58X larger in 2015 compared to the 2009 estimate reported in last year’s report. Any way you look at it, that’s enormous growth.

Importantly, the report accounts for some offsetting effects, most notably the use of WiFi and femtocell networks to “offload” capacity from the mobile network to a fixed broadband connection. Cisco estimates that about 21% of traffic from smartphones and tablets was offloaded to WiFi or femtocells in 2010 and that this proportion will increase to 30% by 2015. This finding demonstrates the vital importance of unlicensed spectrum in helping address our nation’s wireless capacity needs. Still, overall traffic growth is likely to outpace offloading, according to Cisco’s forecast.

Consider what this astounding growth means to American families, to our economy, and to our future. All of those bits and bytes represent new ways of communicating, informing, and transacting with one another. They are video messages sent to grandparents, invoices sent to customers, and research findings sent to universities. And countless other uses, as diverse as the Internet itself. Our obligation at the FCC is to ensure that our wireless rules are flexible enough so that the supply of spectrum will meet this inexorable demand. That’s what keeps us busy every day.

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