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Cisco sees the mobile future and it’s in streaming

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Cisco (s csco), the networking giant, has read the mobile data tea leaves again, and it predicts that this year the global population of mobile users will switch to streaming the majority of their content from “the cloud.” This will represent a shift from downloaded and sideloaded content on their devices to streamed content, such as Netflix (s nflx) movies or Pandora(s P). If you want to know what that looks like, just check out the U.S. which currently hit the tipping point in 2011 with 54 percent of its traffic coming from “the cloud.”

Cisco’s definition of “the cloud” encompasses any service that someone accesses via the web on demand and as you can see in the chart, it will shift globally from a 45/55 percent mix in 2011 to 54/46 percent. And as the years pass the content that will be streamed is likely to be video, since Cisco foresees video comprising 71 percent of all global mobile data traffic. It also sees 71 percent of traffic being streamed from the cloud, although not all video will be streamed and not all streaming content will be video.

The streaming future makes sense. Cisco’s predictions about the growth in download speeds certainly mean our networks will be capable of delivering most content without a hitch (at least on uncrowded networks). And so far, people around the world are tending to use the data in ever-increasing quantities with the average data usage by a smartphone increasing from 92 MB a month in 2011 to 1.2 GB per month in 2016.

Cisco even makes it a point to show how the current top 1 percent of mobile users, will soon be joined by more and more of the remaining 99 percent as time goes by. Cisco notes that the top 20 percent of mobile bandwidth consumers are growing their consumption almost 3 times faster than the top 1 percent. So we have faster networks, people who clearly are using their devices and a lot of video set to hit the mobile network, but Cisco doesn’t really mention a key issue looming like a cliff on the streaming horizon — pricing.

The 10.8 exabytes of data sent over mobile networks per month in 2016 come at a fairly high cost to mobile consumers. And while the average mobile data consumption is predicted to be 1.2 GB per month in 2016, that’s a global figure. In the U.S., Cisco anticipates the average mobile connection will generate 4 GB of mobile data tra?c per month in 2016, up from 317 megabytes per month in 2011. The key for carriers will be to keep pricing slightly ahead of the demand for streaming content. My hunch is our streaming future sets the stage not for innovation in pricing like I had hoped, but a slow ratcheting up of the monthly fees just ahead of demand.

2 Responses to “Cisco sees the mobile future and it’s in streaming”

  1. If data usage is to go up as predicted (which I agree with) the likely source for much bandwidth cost relief to the end user will be third-parties (e.g. sender pays). Today, almost all content delivery types come with a form of “free delivery” in the physical world (Netflix DVDs to the home, newspapers, merchant catalogues, etc.) and the same will be true for online delivery of content. For sure, some bytes will be paid for by the end user spending their own “out of pocket” bytes that they have purchased from the carrier ($X for Y Bytes per month). Other bytes, however, will be delivered for free to the end user by app creators who “pre-bundle” free bandwidth in the apps themselves (greatly simplifying the OSS/BSS reverse billing process for the carrier). This effectively means that someone other than the end-user is paying for bandwidth consumption that is “above the cap” — resulting in greater revenue for the carrier (they no longer leave money on the table), free byte service to the end-user (the regulators are happy), and more content is consumed (content creators and advertisers see no limits on their own growth as they might otherwise in the current data capped world). For more info on this technology (FreeBand) see Thanks!