Wireless Network Traffic 2008-2015: forecasts and analysis

SUMMARY

“Our report provides the first independent forecast of growth in wireless network traffic. We show that fixed- mobile substitution and rapid growth in take-up of wireless data services will lead to unprecedented increases in wireless network traffic. Mobile network operators are at risk if their networks are not ready to support this traffic and the associated fall in revenue per megabyte.”

Product overview

Usage of mobile data services has started to increase significantly, driven by the rapid take-up of smartphones, such as the 3G iPhone, and of plug-and-play USB (HSPA) modems. There is a growing risk that data traffic will strain the capacity of wireless networks, and that networks will not be able to remain profitable while supporting emerging services that generate low revenue per megabyte.

This report provides detailed forecasts of wireless network traffic generated by cellular users. Traffic is broken down by terminal and service type for each major region of the world (Western Europe, North America, developed Asia, Central and Eastern Europe, Central and South America, developing Asia and the rest of the world). The report compares the amount of traffic generated by mobile data services with that arising from conventional mobile voice services, and also assesses the impact of mobile VoIP services on wireless networks. It identifies the types of terminal and service that will have the greatest effect on overall network traffic.

Wireless network traffic 2008- 2015: forecasts and analysis answers your key questions:

• What will happen to the traffic levels on wireless networks as new services and devices stimulate growth in take-up and usage levels of data services?
• How far will the revenue per megabyte from wireless services decrease as traffic levels rise?
• What are the key drivers of and barriers to wireless network traffic over the next seven years?
• How do different types of device, such as USB modems, smartphones and basic mobile phones, compare in terms of the wireless network traffic and revenue per megabyte they generate?
• Which services will have the greatest impact on wireless network traffic?
• When will data traffic exceed voice traffic on wireless networks, and how much bigger will data become?
• What will be the balance between indoor and outdoor traffic carried by wireless networks?
• How will the level of VoIP traffic compare with that of circuit-switched voice traffic?
• How will the trends in wireless network traffic differ between regions?
• What are the major variables in forecasting future wireless network traffic, and how could these influence the amount of traffic carried by networks?

Who should read this report

• Mobile network operators. This is a crucial report for senior executives, business planners and technology and network managers, because it quantifies the capacity required by wireless networks, and the cost per megabyte, over the next seven years. The report will help mobile network operators to define strategies for investment in major new cellular technologies (such as HSPA+ and LTE) and indoor systems (such as WLAN and femtocells), and to decide if they need to control the take-up and usage of particular types of service and device.
• Network equipment vendors. The report is an invaluable resource for senior executives, and product and marketing managers, since it identifies and quantifies mobile network operators' need for new technologies and systems. The report also forms a valuable reference for vendors preparing business cases for mobile network operators to invest in new network capabilities.
• Analysts and investors. The report is essential reading for analysts and investors, who need to understand the magnitude of growth in wireless network services and the implications that this will have for mobile network operators.

TABLE OF CONTENTS

• 5. Document map - Executive summary
• 6. Executive summary [1]
• 7. Executive summary [2]
• 8. Document map - Methodology and structure of the report
• 9. Methodology for forecasts of traffic volume and revenue per megabyte
• 10. The forecasts divide the world into seven major regions
• 11. The basis of the traffic model
• 12. The traffic model considers three types of cellular device: USB modems, smartphones and basic cellular phones
• 13. We have modelled downlink wireless network traffic for a range of services [1]
• 14. We have modelled downlink wireless network traffic for a range of services [2]
• 15. We modelled downlink traffic because it will define the dimensions of network architecture in the forecast period
• 16. Structure of the report
• 17. Document map - Traffic growth drivers and barriers
• 18. Wireless network traffic from cellular users will increase as a result of six main drivers
• 19. Improved cellular devices will increase service usage and wireless network traffic
• 20. The iPhone demonstrates that new smartphone capabilities can significantly increase data traffic
• 21. Widespread deployment of 3G technologies and femtocells will increase usage and wireless network traffic
• 22. 3G enhancements significantly improve throughputs, allowing a wider range of applications to be supported
• 23. More-affordable prices and bundling of services will increase usage and wireless network traffic
• 24. More indoor usage of cellular devices will increase wireless network traffic
• 25. The increasing size and sophistication of Web pages will drive up wireless network traffic
• 26. Increasing cellular penetration will drive up wireless network traffic
• 27. Growth of wireless network traffic from cellular users may be constrained by a number of factors
• 28. Restriction of some types of service and application by MNOs would constrain wireless network traffic
• 29. The use of alternative delivery mechanisms would constrain wireless network traffic
• 30. Improved fixed broadband services, particularly in developed regions, would constrain wireless network traffic
• 31. Document map - Major findings of the forecasts
• 32. Global wireless network traffic from cellular users will be eight times greater in 2015 than in 2008
• 33. Wireless network traffic per customer will increase substantially in both developed and developing regions
• 34. Data traffic will increase quickly and will soon overtake voice traffic in developed regions
• 35. VoIP traffic will increase rapidly in developed regions after 2011
• 36. There will be an increasing proportion of smartphones and USB modems in developed and developing regions
• 37. Cellular device usage for both voice and data services will increase in the home and workplace
• 38. The adoption of data services will increase ARPU, but revenue per megabyte will inevitably fall
• 39. Basic cellular phones will generate the highest revenue per megabyte in 2015 and USB modems the lowest
• 40. Traffic-intensive services will account for an increasing proportion of the traffic mix
• 41. Document map - Comparison of regions
• 42. North America will lead the world in generation of wireless network traffic per cellular customer by 2015
• 43. Wireless network data traffic will exceed voice traffic in both Western Europe and developed Asia by early 2009
• 44. LTE deployment will allowMNOs to offer efficient VoIP services, and developed Asia will lead the way
• 45. With a lower proportion of USB modems, developed Asia will achieve the highest revenue per megabyte
• 46. Western Europe will have the highest proportion of indoor traffic by 2015
• 47. Document map - Variables and sensitivity analysis
• 48. A number of variables could significantly affect future wireless network traffic
• 49. By 2015, total global wireless network traffic could be 24 times that in 2008
• 50. Wireless network traffic per customer in developed regions in 2015 could be 22 times that in 2008
• 51. Revenue per megabyte could fall below USD0.10 by 2015, so network cost improvements will be needed
• 52. Indoor traffic could account for over 80% of total wireless network traffic by 2015
• 53. Document map - Profound implications for MNOs
• 54. The substantial growth in wireless network traffic has profound implications for MNOs
• 55. Document map - Forecasts for individual regions
• 56. Western Europe: strong traffic growth from USB modem services and significant take-up of VoIP services
• 57. North America: the highest network traffic per cellular customer of all regions by 2015
• 58. Developed Asia: VoIP will account for the greatest proportion of voice traffic of all regions
• 59. Central and Eastern Europe: the highest traffic per customer of all developing regions
• 60. Central and Southern America: a large increase in cellular penetration will fuel wireless network traffic growth
• 61. Developing Asia: basic cellular phones and voice services will account for a significant proportion of traffic
• 62. Rest of the World: wireless network data traffic will exceed voice traffic in 2013
• 63. Document map - Annex: Environmental assumptions for the forecasts
• 64. Environmental assumptions for devices
• 65. Environmental assumptions for wireless technologies
• 66. Environmental assumptions for pricing and bundling
• 67. Environmental assumptions for indoor usage
• 68. Environmental assumptions for the growth of Web content
• 69. Environmental assumptions for the growth in cellular penetration
• 70. Environmental assumptions for constraint of certain types of traffic by MNOs
• 71. Environmental assumptions for alternatives to cellular and WLAN delivery of services
• 72. Environmental assumptions for improvements in fixed broadband services
• 73. Document map - Authors, copyright, definitions and key to acronyms
• 74. Authors
• 75. Acknowledgements
• 76. Copyright and disclaimer
• 77. Definition of terms used in the report
• 78. Key to acronyms
• 79. Document map - Lists of figures and tables
• 80. List of figures and tables [1]
• 81. List of figures and tables [2]
• 82. List of figures and tables [3]
• 83. List of figures and tables [4]
• 84. List of figures and tables [5]
• 85. Document map - About Analysys Mason reports and services
• 86. About Analysys Mason
• 87. Reports from Analysys Mason
• 88. Market intelligence services from Analysys Mason
• 89. Custom Research from Analysys Mason

List of figures and tables

• Figure 1: Regional breakdown of wireless network traffic forecasts
• Figure 2: Basis of the wireless network traffic model
• Figure 3: Three types of cellular device included in the traffic model
• Figure 4: Major factors driving increases in wireless network traffic from cellular users
• Figure 5: The average size of a Web page, 1995 - 2008
• Figure 6: The number of cellular and cellular broadband customers, 2008 - 2015
• Figure 7: Major factors constraining traffic growth from cellular users
• Figure 8: Household penetration of fixed broadband services in selected countries, 2007 - 2012
• Figure 9: Worldwide downlink traffic from cellular handsets, by region, 2008 - 2015
• Figure 10: Average downlink wireless network traffic per cellular customer, 2008 - 2015
• Figure 11: Data services as a proportion of wireless network downlink traffic from cellular handsets, 2008 - 2015
• Figure 12: VoIP as a proportion of wireless network downlink voice traffic, 2008 - 2015
• Figure 13: Proportions of different types of cellular device in developed regions, 2008 - 2015
• Figure 14: Proportions of different types of cellular device in developing regions, 2008 - 2015
• Figure 15: Proportion of wireless network downlink traffic that is generated indoors, 2008 - 2015
• Figure 16: Revenue per megabyte of wireless network traffic generated by cellular handsets, 2008 - 2015
• Figure 17: Revenue per megabyte of wireless network traffic generated by different types of device, 2008 - 2015
• Figure 18: Proportions of downlink wireless network traffic by service in developed regions
• Figure 19: Proportions of downlink wireless network traffic by service in developing regions
• Figures 20 and 21: Average wireless network downlink traffic per cellular customer in developed and developing regions, 2008 - 2015
• Figures 22 and 23: Data services as a proportion of wireless network downlink traffic in developed and developing regions, 2008 - 2015
• Figures 24 and 25: VoIP as a proportion of total wireless network downlink voice traffic in developed and developing regions, 2008 - 2015
• Figures 26 and 27: Revenue per megabyte of wireless network traffic from cellular handsets in developed and developing regions, 2008 - 2015
• Figures 28 and 29: Proportion of wireless network downlink traffic that is generated indoors in developed and developing regions, 2008 - 2015
• Figure 30: Total wireless network downlink traffic from cellular handsets worldwide, in three scenarios, 2008 - 2015
• Figure 31: Wireless network downlink traffic per customer from cellular handsets in developed regions for three scenarios, 2008 - 2015
• Figure 32: Wireless network downlink traffic per customer from cellular handsets in developing regions for three scenarios, 2008 - 2015
• Figure 33: Revenue per megabyte of wireless network traffic from cellular handsets in developed regions for three scenarios, 2008 - 2015
• Figure 34: Revenue per megabyte of wireless network traffic from cellular handsets in developing regions for three scenarios, 2008 - 2015
• Figure 35: Proportion of wireless network traffic that is generated indoors in developed regions for three scenarios, 2008 - 2015
• Figure 36: Proportion of wireless network traffic that is generated indoors in developing regions for three scenarios, 2008 - 2015
• Figures 37 and 38: Wireless network downlink traffic per customer from cellular handsets in Western Europe, by service and device type
• Figures 39 and 40: Wireless network downlink traffic per customer from cellular handsets in North America, by service and device type
• Figures 41 and 42: Wireless network downlink traffic per customer from cellular handsets in developed Asia, by service and device type
• Figures 43 and 44: Wireless network downlink traffic per customer from cellular handsets in Central and Eastern Europe, by service and device type
• Figures 45 and 46: Wireless network downlink traffic per customer from cellular handsets in Central and South America, by service and device type
• Figures 47 and 48: Wireless network downlink traffic per customer from cellular handsets in developing Asia, by service and device type
• Figures 49 and 50: Wireless network downlink traffic per customer from cellular handsets in Rest of the World, by service and device type

• Table 1: Key metrics from developed region forecasts
• Table 2: Key metrics from developing region forecasts
• Table 3: Individual services modelled
• Table 4: Examples of downloadable iPhone applications that could consume substantial amounts of data
• Table 5: Summary of advanced cellular broadband technologies
• Table 6: Traffic modelling assumptions for devices
• Table 7: Traffic modelling assumptions for wireless technologies
• Table 8: Traffic modelling assumptions for pricing and bundling
• Table 9: Traffic modelling assumptions for indoor usage
• Table 10: Traffic modelling assumptions for the growth of Web content
• Table 11: Traffic modelling assumptions for the growth in cellular penetration
• Table 12: Traffic modelling assumptions for constraint of certain types of traffic by MNOs
• Table 13: Traffic modelling assumptions for alternatives to cellular and WLAN delivery of services
• Table 14: Traffic modelling assumptions for improvements in fixed broadband services