Surging consumer and business demand for mobile content, either at home or on the go, will outpace the ability of service providers to provide it unless investments are accelerated in areas like 5G and the cloud, according to a report by Bell Labs Consulting, a division of Nokia Bell Labs.
The report focuses on the future of wireless networking for the new digital era by offering a unique perspective on the intrinsic demand for wireless capacity through 2020. It analyzed the future demand for digital content and services, rather than just looking at past and current mobile traffic trends.
Across the study’s five identified application areas – streaming, computing, storing, gaming and communicating – Bell Labs Consulting found that audio and video streaming will be the highest contributors to the increased traffic demand in coming years, accounting for a 79 percent total increase by 2020.
Bell Labs Consulting models show that by 2020, 67 percent of the worldwide consumption demand forecast can be met by Wi-Fi. Another 14 percent can be addressed by the current adoption rate of 3G, LTE, small cells and the emergence of new technologies such as 5G. Between now and 2020, that leaves 19 percent of demand unable to be satisfied based on current and projected economics. Thus, network operators will need to accelerate their path to 5G and cloud technologies, such as network function virtualization (NFV) and software-defined networking (SDN), and adopt new business models to address the demand gap.
The emerging unknown in the network equation is IoT. The number of IoT connected devices is expected to grow from 1.6 billion in 2014 to between 20 and 46 billion by 2020. Of this total, cellular IoT devices will be between 1.6 billion and 4.6 billion in 2020. Despite this massive adoption, the overall cellular traffic generated by IoT devices will only account for 2 percent of the total mobile traffic by 2020 until video-enabled sensors and cameras begin to predominate.
However, even in the near term IoT traffic will generate a substantially higher volume of signaling traffic relative to data traffic. For example, a typical IoT device may need 2,500 transactions or connections to consume 1 MB of data, while the same amount of data can be consumed in a single mobile video connection. As a result, daily network connections due to cellular IoT devices will grow by 16 to 135 times by 2020 and will be three times the connections initiated by human generated traffic.
Other key findings in the report include the following:
By 2020, global consumption demand for digital content and services on mobile and portable devices will see a global average increase of 30 to 45 times from 2014 levels – with some markets experiencing as much as a 98-fold jump.
Region to region, the unaddressed consumption demand ranges from 3 to 36 percent, globally averaging around 19 percent.
In North America, video communications traffic will rise from 47 to 86 percent, driven by millennial teens and young adults. As video calls and conferencing rises, email traffic will fall, from the 47 percent of communication traffic it represented in 2014 to about 7 percent in 2020. Meanwhile messaging will become a more dominant form of communications.
The majority of streaming, about 66 to 74 percent, will come from home-based networks – driven by more content and larger, higher-resolution devices.
There will be significant growth in upstream IoT video streaming after 2020.
Virtual reality-based services will not be a major component of traffic growth in the next few years, although it is expected to contribute significantly to demand between 2020 and 2025.
Nokia Bell Labs launched its consulting division in March 2015, in order to apply deep analysis, hands-on experience and sophisticated techno-economic modeling tools to some of the key challenges facing the IT and communications networking industry. In this study, rather than extrapolate future mobile traffic demand based on current baselines and growth rates, Bell Labs Consulting presents demand models built from the ground up based on its own research and available external data.
Marcus Weldon, president of Nokia Bell Labs and CTO, said: “The next evolution of humankind will involve ‘life automation’, and the creation of a world in which billions of interconnected things including smart objects, cameras, robots, sensors and processes exchange real time video and data streams – not only with people, but with cloud-based systems that extract knowledge from this data and perform tasks to make our work and home lives more convenient and our environments more intelligent. This new digital era will produce a dramatic shift in demand, challenging mobile operators to achieve the highest performance at the lowest cost per bit while supporting extensive personalization.”
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