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.

CES 2017 Recap: From a Service Provider Perspective

Written by CSE,  Drew Kempen

The Relevance of CES

In order for any business to thrive and grow, it must be able to adapt and plan for changes in the market space. What is changing? When will it change? How will we make that change? What are the options? How much will it cost? Attempting to answer these questions requires a large dose of prognostication. CES is one of the best windows into the future that the service provider industry has. CES is effective because it focuses on the consumer; what they will be using and how they will be using it. This drives the migration of services that are important to consumers, thus driving network changes.

With a tagline of ‘WHOA’, CES 2017 seemed to come up short of anything mind-blowing this year. CES 2017 was essentially 2016 v1.1. We saw primarily the same technologies, slightly more refined. This is an encouraging trend for service providers. For a number of years, there has been much change and uncertainty about which directions both consumers and manufacturers would grow. We are now seeing a more stable and focused technology wave.

Last year, 4K and Virtual Reality (VR) were all the rage. This year, we had a few slight modifications to that. Almost every booth in 2016 had some version of 4k playing video in their booth, regardless of the products they were touting. This year, almost every booth had a VR experience. Also, rather than 4k being highlighted; it was HDR technology that took center stage.

All Things IP

Last year we saw an explosion of new connected devices and concepts. Very few ‘new’ ideas were demonstrated this year, however, there was a strong focus on refining these products. From Streaming boxes to VR to wearables; the focus was on better performance, better design, and more functionality. This stronger focus on technologies allow us to get a clearer picture of where services are going, thus defining which direction our network needs to grow.

4K, HDR and VR will continue to drive the next video transition. However, this transition also comes along with a migration of this video content to all IP. While video is alive and well, it is clear that traditional forms of video services are fading. Consumers are becoming more and more accustomed to on-demand, no/minimal commercial, and a seamless/mobile viewing experience. The crux of future video uncertainty currently rests with the content providers and networks. What will they do with broadcast, commercials, re-transmission rights, bundle requirements, and contract negotiations? With a-la-carte channels, skinny bundles, and quality original programming from OTT players such as Netflix and Amazon Prime; consumers continue to take back power from the networks. No one yet knows how or if they will adapt.

In the meantime, it is the OTT and direct to consumer streaming apps that are taking the lead with 4k, HDR and VR services. True 4K and HDR undoubtedly offer a mesmerizing large screen experience. Just as the theater experience continues to attract 10’s of millions of customers keeping the theater industry relevant, 4k and HDR can do that for the living room experience. As we see the OLED paper-thin televisions develop, it validates that the large screen experience is here for the long-haul.
OLED is Awesome

The thin OLED televisions were arguably the coolest piece of technology at the show. The current generation of LG W OLED TV’s are less than 4mm thick. The newest advancement which wasn’t shown at the show is less than 1mm thick, and can be rolled like a newspaper! It is not difficult to envision an entire wall of the living room becoming an OLED TV in the future essentially making your wall an IMAX theater. Looking even further out into the future, one could certainly see an entire room dedicated to 360 degree OLED essentially giving you a headset free VR experience.

VR Continues to Impress

VR once again took center stage at this show. The reason this is so interesting is that VR is truly in its infancy. In many ways, VR is currently a parlor trick. When you put on the headset, it quickly becomes immersive, fascinating and addictive. However, when you think about it in the real world, it still has a long way to go. The content is minimal, functionality is crude, and video quality is extremely poor. Yet it still is growing in use at a rapid pace. One can only imagine how more effective and desirable this service will be when it is refined and in a true HD format.

All this means one thing for service providers. The pipeline will always be growing and growing fast. Historically, a 50% CAGR for data usage has been seen. There is certainly no reason to think this will slow down and could very well me more than this for the next few years as these technology and service transitions mature.

While there are certainly challenges to service providers in continuing to grow the network, the growing requirements of large bandwidth streams and services presents a significant opportunity and welcome trend. It keeps their hardline service relevant and required to the home, potentially staving off the next generation of LTE capabilities as a peer competitor.
Virtual Traffic Jam

Finally, service providers must consider the implications of the combination of exploding wi-fi connected devices within the home, mobile streaming devices and TV’s, and the large stream rate requirements of 4k, HDR, and VR. This presents a huge wi-fi, network management, and security issue within the home. It also presents so a growing opportunity and market for new revenue-generating services of which the service provider is in an ideal situation to provide. A number of vendors were showcasing new wi-fi management platforms that provide visibility to the in-home network and devices. While these are almost all in their first software generation of functionality, the platforms provide the capabilities required to help service providers delve into these abilities today, while providing the scalability to increase capabilities and functionality with software upgrades.

Summary: Future-world

For those of us who grew up in the 70’s and 80’s, by now we should be playing in holo-decks, visiting the moon, speaking some version of pseudo English-Chinese, and flying around rather than driving. In reality, the next-generation future world lies before us. Self-driving connected cars before flying, VR before holo-decks, and obviously google translate is the mechanism that will facilitate the English-Chinese language transition. Every device, application, and execution of what we do in life is becoming connected and part of the way we live. There are few things that slam this reality into mind than your child wondering why a hotel remote has so many buttons and doesn’t know why you can’t speak to the remote. It’s no wonder the generation of knob-turners didn’t make the transition to flying cars and the moon. Perhaps our current generation of ‘remote control talkers’ will take us there. 

Stay in touch with Drew on Twitter at @DrewKempen