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Wednesday, February 06, 2013

New Cisco mobile VNI numbers bring some realism

"Steady increase".

Makes a welcome change from "exponential" and similar hyperbole in the past.

Cisco has put out its revised 2012-2017 forecasts for mobile data traffic. I'm horribly busy today so I can't put out a forensic analysis or listen in live to the webcast.

However, a couple of headlines:

Cisco has reported global mobile data growth of 70% during 2012, and revised down its 2013 mobile data traffic forecasts from 2.4EB to 1.6EB, and 2016 forecasts from 10.8EB to 7.4EB (EB=Exabyte). I think it's still being over-enthusiastic, but this is a welcome return to a sense of reality.

"Tiered plans are effective" - to me, this is a key point of understanding and change to Cisco's methodology. Basically, caps and tiers are effective at changing subscriber behaviour. More fancy approaches are (largely) unnecessary - and as I've often written before, this indicates that all the pain associated with unworkable application-specific tariffs can be avoided.

Also, it has recognised that WiFi use is much higher than first thought - although it's a little unclear whether it is just counting "true offload" (ie data that would otherwise have gone over cellular), or also includes what I term "private WiFi use" and extra elasticity, as users exploit free/fast connections by using more data than they otherwise would have.

Where I have doubts is about its forecasts of usage per device, which don't appear to have factored in late-adopters (& emerging market users') likely much lower usage than more "experienced" or "enthusiastic" smartphone owners. 

While I applaud Cisco for (perhaps belatedly) down-grading its forecasts, I'm not convinced that deleting its earlier numbers and predictions from its website was such a wise move. As a forecaster, you need to be able to be proud when you get it right, and humble when you get it wrong. (FAQs: "Historical IP traffic numbers attributed to the Cisco VNI are listed in Wikipedia" - why?) I found a mirrored version of last year's full report here.

Overall, I'm feeling pretty vindicated. I put out a long blog post last year on why I thought many forecasts were over-cooked, and it's something I've gone into greater depth with my consulting clients. It's good to see some revisions - now we've got past the "tsunami" hype we can focus on how to make the right investment / network / service packaging decisions.

Edit: great & detailed analysis by Tim Farrar here

(Sidenote: Qualcomm, now *please* stop with the 1000x marketing slogan. You're now at the top of the forecast-inflation league table) 


Kevin Petschow said...

Cisco has consistently revised VNI predictions to reflect new data and has always posted only the most recent forecast on our web site. We are predicting decreased mobile traffic growth rates for the following reasons: New data suggests, particularly in Western Europe, mobile laptop traffic growth is declining, and laptops will not be used to access mobile networks to the extent previously projected. Also, data caps are playing an increasing role in limiting traffic volumes. Furthermore, the economic climate in Europe has also played a role as has the law of large numbers.

Our latest study can be found here: http://www.cisco.com/en/US/solutions/collateral/ns341/ns525/ns537/ns705/ns827/VNI-Forecast_QA.pdf

And a supporting FAQ is here:

Dean Bubley said...

Hi Kevin

Thanks for this.

I agree about laptop usage falling off, partly because operators have stopped pushing cheap 3G dongles for residential use, and partly because of more free WiFi in public. However, that trend was visible some time ago, as was the effect of data caps.

I posted this in November 2011 - http://disruptivewireless.blogspot.co.uk/2011/11/smoking-gun-i-think-o2-uk-has-falling.html for example.

As for "only the most recent forecast": well, cisco.com still has the 2010-2015 Mobile VNI accessible. http://newsroom.cisco.com/ekits/Cisco_VNI_Global_Mobile_Data_Traffic_Forecast_2010_2015.pdf

It's only the 2011-2016 which has been removed. Either way, most forecasting organisations archive their older documents, so observers can assess accuracy of prior predictions. I don't delete my old reports or blog posts if history turns out different to the way I'd expected.


Linda Jackson said...

Thanks for analyzing the hype surrounding telephony. Each new technology aims to offer better features and advantages. So people will opt for the better product to enjoy uninterrupted wireless connectivity.

Linda Jackson said...

Thanks for highlighting the constant fluctuations in VNI predictions by Cisco. With technology changing at a much faster pace, no one can predict the consumer behaviors and preference in advance. There is a sharp decline in the number of laptop computer users. But a higher rate of growth is noted in the base of smartphone and tablet users. So the increase in the handheld device users may increase the VNI predictions for next few years.