TMCnet Feature

In a March 2011 presentation AT&T projected that data volumes would grow by eight to 10 times between the end of 2010 and the end of 2015. That forecast appears to be based on an expectation that volumes would roughly double in 2011 and then increase by a further 65 percent in 2012.

Instead, some AT&T statements suggest 40 percent annual growth is being seen, some have argued. That probably refers to data consumption by devices using the mobile network. The 100 percent forecast likely reflects all device consumption, including “offloaded” consumption supplied by Wi-Fi networks. Now, 40 percent annual growth is significant.

The upshot is that, if nothing changes, AT&T has to prepare for data consumption growth of perhaps 100 percent annually, on a near term basis, with extreme reliance on offload mechanisms.

Nobody knows whether the rate will change in the future, and if, so, how it will change. That raises an obvious question for mobile service providers: how much bandwidth do they need to be ready to supply to customers?

The question might be easier to answer if demand were not if end user demand was predictable, but demand is not predictable. Sometimes growth is “only” 40 percent a year; sometimes it is higher.

Cisco (News - Alert) in early 2011, for example, estimated that global mobile data traffic grew 2.6-fold in 2010 – just one year – nearly tripling for the third year in a row. 

According to the latest Cisco Visual Networking Index, worldwide mobile data traffic will increase 18-fold over the next five years, reaching 10.8 exabytes per month, an annual run rate of 130 exabytes, by 2016.

This mobile data traffic increase represents a compound annual growth rate of 78 percent. That forecast would not be out of line with experience over the past couple of decades, where annual growth of undersea bandwidth consumption has grown at rates between 40 percent and 60 percent annually.
That does not mean “local” consumption in a particular region or country will be at the “average” level. Consumption might well be higher in some regions and lower in others.

The point is that rates of growth ranging from 40 percent to 100 percent, for any provider, in any market, would not be unusual. What has to be accounted for, at AT&T is the 100 percent overall demand growth, the offloading of about 60 percent of that demand, and the mobile network growth of 40 percent, which might largely represent the incremental demand from new customers.