Are we prepared for bandwidth growth?

Analyzing the 50% Growth Rate of Data

Author: Drew Kempen, Solution Director - Strategy & Consulting 

Since the inception of consumer data services, history has shown that a 50% data growth CAGR on a year-over-year basis is seen. At least when averaged out over that time period. That essentially breaks down to a doubling of traffic usage every 18 months and corresponds with Nielsen’s Law (Nielsen, 1998). This continual growth rate presents a significant challenge for operators who continue to need to migrate and scale their networks. One would think that a provider that provisions their network for 50% utilization of available capacity would be smooth sailing for awhile.  In relative terms, that may be correct but it still means you may be at 100% utilization in just 18 short months. The network never stops growing.

Much of this growth over the past decade has been the gradual transition of consumers to Over-the-top streaming services. Companies like Netflix, Hulu, Amazon, YouTube and now SlingTV and DirectTV-Now have brought an entirely new experience to the subscriber. In addition, more and more data moves to the cloud. Information once stored on disks and hard drives such as video, pictures, data files, and backups are now becoming common cloud operations consuming larger amounts of downstream and upstream bandwidth. As people continue to migrate to this method of IP-delivered video, this growth trend of data usage will continue. 

One must ask the question however, will this ever slow down, or will it speed up? Many operators have a difficult time planning past 18 months. For those who are trying to be proactive, they are probably basing their growth on a 50% CAGR. Others, however, are being extremely proactive by rolling out 1 GB service initiatives today. Much debate has been had over the practicality of a 1 GB service. Other than marketing, what is the true need?  When will we really ‘need’ that much pipeline. 

At the doorstep is 4K and HDR technologies. The typical streams for these technologies can range from as low as 15 MBPS to over 30 MBPS and varies based on if it is true 4K, frames per second, and compression technologies. However, even at worst case and with a number of simultaneous streams, a household may only be pulling 100-200MB of traffic.  Certainly a hog on the aggregate bandwidth, but barely a dent in a 1 GB service. The evolution and adoption of these services via IP certainly seems to fit well into the 50% growth CAGR of data when looking at a 5-10 year period. 

For example: Assume that the peak utilization of data divided by the amount of subscribers is in the 2-3MB range today. This is certainly on the high side for most operators. At a 50% CAGR, this is how that average grows (shown in kbps per sub on average). 

2016	2017	2018	2019	2020	2021	2022	2023	2024	2025
2000	3000	4500	6125	10125	15188	22781	34172	51258	76877

This growth trend and curve fits nicely with the 50% CAGR model that we have seen. As the big push to streaming services carried that curve for the last decade, it will continue to grow by adding additional subscribers as well as the resolution quality of the video advance. 

What could change the model?

There are some reasons for a concern of a disruption of this model. All of this growth has revolved around one thing that has remained somewhat unchanged. The viewpoint of all of these screens was fixed. It was a rectangle. While size does matter in the ABR world, it is still a small viewing window relegated to the size and shape of televisions and devices.  Virtual reality is changing that model. That small window into life now becomes a full 360 viewpoint. 

If you have been to CES the past few years, you have seen the rapid adoption and development of VR technology. At first, it seemed interesting but gimmicky and far from being useful. Then it looked like the next revolution for gaming. Now it looks like the next revolution for video. Today, VR is addictive and immersive. However, content is limited and video quality is far from SD, much less HD. However, the long-term end-game of VR is exactly that. A virtual replication of reality. A 360-degree view that has the same resolution as the human eye is capable. Now, we are a ways from being able to replicate that from a screen and camera standpoint; but the resolution we can achieve today is impressive. 

There is a great article to gather more information on this referenced below where the author points out that a VR stream in 4k would use approximately 300 MBPS (Begole, 2016). That is with some pretty hefty resolution. They also do the math that a 5.2GB stream would be required to come close to replicating the human eye experience. While we may be decades from a human eye experience, 4k VR is certainly realistically achievable in the next 5 years. This would be a truly disruptive service to the traditional 50% CAGR model if these capabilities mature and the demand increases. 

Before you discount the potential of this, consider this: In the 2016 Olympic games, some of the content was made available in VR. By 2020, a much larger amount of Olympic programing will be available in VR and much better quality. Now imagine being able to watch an Olympic event from a stadium seat or floor-side viewpoint in 360 HD. Then imagine watching a basketball game from the scoring table or Saturday night live as if you were sitting in the audience. Perhaps you will be able to buy a ticket to a Broadway show and never leave your living room. The applications and potential are awesome for consumers and stomach churning for network planners! 

Will VR take off? Will people want to wear a headset? Keep in mind that VR is essentially in the ‘Nintendo NES’ phase of its technology cycle. It is going to get a whole lot better and easier to use. 

All of the sudden, a 1 GB service doesn’t just seem like a marketing ploy any longer.  Thankfully, none of this is going to happen overnight and there will be visible signs of when it will happen and the adaptation will be gradual. It is worth noting however that there are signs today that need to be taken into account. We can already see the potential that this will have on the horizon. Do the network enhancements and investments you are making today leave room for migration, scaling and adaptation for this possible disruption? 

It will be interesting to see what happens with VR and if it will disrupt the growth model most network migration plans are accounting for.

CCI can help you ‘Future-proof’ the Network

Future-proofing is in many ways an inaccurate term. Future-resistant is a better term as you never know exactly what will happen in the future. However, the ability to plan for multiple scenarios exists today. This planning is not easy. There are multiple dynamics and metrics to consider that are not easy to analyze. It can take a lot of time and resources that many operators do not have, particularly the mid to smaller operators. For a traditional cable operator, it is all too easy to fall into the fix it when it breaks or shows signs of breaking mentality. 

Fortunately, CCI has the expertise, experience, and tools to help you plan across-the-network. From analyzing growth trends and service migration to architecture migrations.  From the core/route/transport aspect to DOCSIS, HFC, and FTTx technologies. 

For more information, reach out to Drew via Twitter at @drewkempen

References

Nielsen, J. 1998. Nielsen’s Law of Internet Bandwidth. Retrieved January 25^th from www.nngroup.com.

Begole, B. 2016. Why the Internet Pipes will burst when VR takes off. Retrieved January 17^th from www.forbes.com.