Facts, Figures, Metrics, Population Growth, BRIC, and CDN Economics

Cisco forecast global IP traffic to increase from 91.3 exabytes (91,300 Petabytes: 1 exabyte = 1,000 to petabytes) in 2016 to 131.9 exabytes (131,900 petabytes) in 2018. According to the same report, CDNs will carry 55% of the Internet traffic by 2018, compared to 36% in 2013. Finally, global fixed broadband speeds will reach 42Mbps in 2018 from 16Mbps in 2013.

Cisco Estimates

  • Global IP Traffic will grow from 91.3 Exabytes in 2016 to 131.9 Exabytes in 2018
  • CDNs will carry 55% of the traffic in 2018 from 36% in 2013
  • Global fixed broadband speeds will reach 42Mbps in 2018 from 16Mbps in 2013

To add more depth to the estimates above, let’s contrast the estimates above to the World Population metrics. In 1804, the world population was 1B. Then 2B – 1927, 3B – 1960, and 7.2B – 2014. The BRIC (Brazil, Russia, India, China) nations represent 3B of the 7.2B and India will surpass China’s population by 2030.

Population by Year

  • 1760 – 770M
  • 1804 – 1B
  • 1927 – 2B
  • 1960 – 3B
  • 1974 – 4B
  • 1987 – 5.1B
  • 2002 – 6.2B
  • 2014 – 7.2B
  • 2030 – 8.4B

 BRIC 2014 Population

  • Brazil – 203M
  • Russia – 142M
  • China – 1.4B
  • India – 1.28B
  • Total = 3B

Fiber-to-the-home Broadband Roll Outs

  • Comcast to roll out 2Gbps to 18M homes by end of year
  • CenturyLink plans to introduce 1Gbps to 700k homes by year end, and has already extended 1Gbps connectivity to 490k businesses
  • Singtel will offer customers GPON next quarter, with the option for 10Gbps. More than 70% of Sintel customers are on fiber, which makes transition to GPON that much easier
  • Windstream plans on rolling out GPON (1 Gbps) to all fiber connected home in the next few years

All the data points above are massive in every respect. The GPON and World Population metrics are large enough to make the Cisco global IP traffic estimates conservative at best. Gigabit connectivity is being deployed across the world in the hundred million range. For every 100M GPON FTTH connection activations, the capacity of the last mile is increasing by the same amount. That leads to the question, what about the core network that support the GPON consumer? The good news is that GPON reduces deployment cost by 70% according to some estimates, because it requires less equipment, space, and electricity to power GPON equipment than copper. Thus, carriers enjoy the benefit of adding newer equipment with more features, and lowering deployment / operational cost.

Another significant trend, the population demographic is shifting in a major way. Not only are the BRIC nations growing faster than G7 countries, but their purchasing power is increasing as well. Also, there are many other non-G7 nations growing fast such as Nigeria, which will reach 1B population by 2100. This in turn increases the addressable market for CDNs, as these new online consumers will soon open up to all things content. Some CDNs have begun preparing by building CDN infrastructure in these regions, and others haven’t figured it out yet. The winners in this game are the ones that take the risk in building out for the future, before everyone else, just as Akamai did many years ago.

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