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When Will Data Traffic Growth Slow Down?

By Alex Braelow

data-traffic-growth

It’s tough to think of many moments in the past 15 years that were more consequential than the day Steve Jobs announced the first iPhone at the Worldwide Developers Conference in 2007. The concept of what a cell phone was, and what it could do, changed overnight. More importantly, it set off a decade of remarkable innovation. Everything from video streaming to social media, to online shopping and online banking, was retooled to fit within a mobile context.

Of course, because more could be done with a cell phone, more was done. Indeed, over the last few years consumption of data has skyrocketed. If you are a carrier, you know two things for certain: 1) people want more data this year than they did last year, and 2) people will want more data next year than this year. We’ve all seen the reports.

One wonders, then, will this thirst for data ever be quenched? David Reinsel, a Senior Vice President at the research and consulting firm IDC, has his doubts.

“For the foreseeable future I don’t see demand subsiding in any tangible way,” Said Reinsel, “Though, granted, it will ebb and flow.”

Interestingly, the growth percentages are trending downward. But to Reinsel’s point, when you actually pop the hood of those topline statements, you see that the number of growth drivers are increasing as network capabilities grow, and consumers and organizations become more reliant on wireless networks.

And before for you seize too hard on the downward trend of demand, consider that the declining percentage of growth is more likely a result of the base growing larger over time. After many years of tremendous gains, it is inevitable that growth percentages shrink. Indeed, the overall amount of data being used continues and will continue to grow significantly.

Evidence of this is available in Cisco’s 2017 “Visual Networking Index,” which notes that IP traffic is set to increase threefold from 2017 to 2021. That’s good for a compound annual growth rate of 24%. Furthermore, wireless and mobile traffic are expected to account for more than 63% of IP traffic by 2021. An updated version of Cisco’s report, which is due out later this year, is not expected to diverge from these numbers in any significant way.

Additionally, Patrik Cerwall, the editor of the Ericsson Mobility Report, explained that data growth before 2013 was at roughly 100% per annum. It then dropped to 70% in 2015 and 2016, and then to 60% in 2017. This year, it is expected that the increase will be around 50%. In spite of the declining percentages, Cerwall noted that we will have eight times more data in 2023 than in 2017.

To put these incredible numbers into perspective, Cerwall explained, “Right now, people in North America use an average of about 7 GB per month of data. The amazing thing is that we predict that will go up to 49 GB per month by 2023.”

What exactly is driving this growth? Well, there are a number of things happening all at once. IDC addressed this question in a study titled “Data Age 2025: The Evolution of Data to Life-Critical.” They emphasized the following five trends that will intensify the role of data in the future: The continued evolution of data from business background to “life-critical;” the proliferation of embedded systems and the IoT; the increasing use of mobile and real-time data; data usage from cognitive computing and artificial intelligence (AI) systems; and the demand for increasingly comprehensive security systems.

In this study, IDC also postulates that the “global datasphere” will reach 163 zettabytes by 2025. That is ten times more than the 16.1 ZB of data generated in 2016.

But here’s what it boils down to: as services become increasingly complex, the demand for better networks increases. As networks improve, they allow for even more complex services. With this in mind, it’s unlikely that we see any significant drop in data traffic growth in the foreseeable future.