Internet video traffic will become the dominant factor in overall growth this year, exceeding peer-to-peer traffic in volume for the first time by the end of 2010, says Doug Webster, senior director of service provider marketing for Cisco. That has significant meaning for Internet service providers, who have to not only build in the intelligence to enable their networks to handle the video deluge ahead of time, but also have to figure out how to monetize it.
"The need to look at business models is going to be heightened -- they will need to find ways to monetize the traffic," Webster says. "Service providers need to not to look at themselves as telecom providers and instead consider what they can do to move into ancillary addressable markets, such as advertising and finance. They can't just continue to bill on the amount of bits going through a pipe but on the overall value of what they are delivering."
That's particularly true because consumer Internet traffic is going to continue to outstrip business Internet traffic -- for which service providers can generally charge more -- so that by 2014, consumer traffic will represent 87 percent of monthly Internet traffic, up from 79 percent in 2009.
In releasing its annual forecast of what global Internet traffic is going to look like in the coming years, Cisco isn't trying to tell service providers exactly how to develop new pricing models, Webster cautions. That challenge is still up to individual operators, as they consider whether to offer service tiers or some kind of metered billing.
Cisco also is offering up an enhanced consumer application that lets individual consumers measure how much traffic they generate from a given PC and compare their individual data against other consumers using the Cisco widget, which is available here: http://downloads.ciscopulse.com/vni.
Other highlights of the Cisco VNI forecast:
- Global IP traffic is expected to increase 4.3 times from 2009 to 2014, reaching 63.9 exabytes per month in 2014, up from approximately 56 exabytes per month in 2013. The combined annual growth rate (CAGR) is actually down.
- By 2014, North America will be generating the most traffic, at 19 exabytes per month, but Latin America will be growing fastest with a 51 percent CAGR off its smaller base of traffic.
- Advanced video traffic, including 3D and high-definition TV, will increase 13 times between 2009 and 2014. By 2014, 3D and HD video is forecast to comprise 42 percent of total consumer Internet video traffic.
- Global mobile data traffic will increase 39 times from 2009 to 2014. And by 2014, annual global mobile data traffic will reach 3.5 exabytes per month, with video representing the majority of that traffic.
Cisco's VNI Forecast is based on a compilation of published analyst reports, Cisco's own assumptions about individual usage based on its primary research, and a complex modeling process, Webster explains.
— Carol Wilson, Chief Editor, Events, Light Reading