So the latest version of Cisco’s VNI mobile data traffic forecasts has been released today, and yet again Cisco are predicting a “data deluge“. However, there appears to be huge uncertainty in their forecasts due to the impact of data “offloading” (to WiFi and fixed broadband networks). As others have noted, Cisco “heavily downplays” the role of WiFi in future networks, and has gone so far as to drop the table in its Feb 2011 report which depicted the amount of offloading they projected by country for tablets and smartphones.
In the 2012 report Cisco also confuses the matter by referring to the large amount of “fixed and WiFi traffic” associated with “portable devices” (meaning laptops and WiFi-only tablets). However, it is still possible to get hold of some equivalent information on the offloading assumptions from the 2012 forecast by use of the VNI mobile forecast tool on Cisco’s website which states that:
23% of the United States’s mobile data traffic was offloaded in 2011.
37% of the United States’s mobile data traffic will be offloaded in 2016.
49% of the United States’s handset/tablet mobile data traffic was offloaded in 2011.
46% of the United States’s handset/tablet mobile data traffic will be offloaded in 2016.
Though the first two assumptions appear at first sight to be broadly comparable with Cisco’s 2011 assumptions, in reality the comparison should be lines 3 and 4 giving the handset/tablet traffic. In Feb 2011 Cisco apparently believed that US smartphone/tablet users offloaded 21% of traffic in 2010, and that this would increase gradually to 30% of traffic in 2015. Now Cisco appears to believe something completely different, that almost half of mobile data traffic is offloaded, but that is set to decrease in the future. So was Cisco just drastically wrong in their assumptions about offload last year? Is that why they are trying to hide the change in assumptions? What basis did Cisco have for these assumptions last year and today – are they based on real measurements of offloading or just guesswork? And just how much credence can we give to their current offload assumptions?
Of course, the offload assumption is a primary driver of Cisco’s future traffic growth projections because smartphones are expected to account for the majority of future data usage:
In the United States, smartphone mobile data traffic will grow 41-fold from 2011 to 2016, a compound annual growth rate of 110%.
In the United States, smartphone mobile data traffic will reach 1,047,312 Terabytes per month in 2016.
In the United States, smartphones will be 60% of total mobile data traffic in 2016, compared to 24% at the end of 2011.
In the United States, the average smartphone will generate 4,524 megabytes of mobile data traffic per month in 2016, up 2,146% from 201 megabytes per month in 2011, a CAGR of 86%.
Simply put, Cisco needs to do a much better job of justifying its offloading assumptions and stop trying to hide the ball. GigaOm has highlighted that WiFi and offloading more generally are likely to be key themes for the wireless industry in 2012, and while this forecast may help to sell more boxes and provide fuel for the spectrum crisis narrative, Cisco is not doing its credibility any favors. As Henry David Thoreau wrote: “If you have built castles in the air…now put the foundations under them”.