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Video Fuels Bandwidth Binge

The surfers are hungry — and they’re going to get hungrier.

Online video consumption will more than quadruple from 2011 to 2016, as billions of users worldwide — with more devices on faster connections — are set to drive overall network traffic usage to unprecedented peaks, according to Cisco Systems’ annual network forecast.

By 2016, the amount of annual global Internet-protocol traffic will be 1.3 Zettabytes (equivalent to 1.3 trillion Gigabytes), according to the Cisco Visual Networking Index (VNI) Forecast for 2011-2016. By comparison, the total amount of IP traffic estimated from 1984 at the dawn of the Internet through the end of 2012 was 1.2 Zettabytes.

And network operators will have to figure out how to continue catering to Internet users’ insatiable appetite for more bandwidth. “Even we have to take a step back and be astonished at the volume of traffic,” Cisco VNI senior analyst Arielle Sumits said.

By 2016, Cisco expects there to be 3.4 billion Internet users — about 45% of the world’s projected population, according to United Nations estimates. The average fixed broadband speed is expected to increase nearly fourfold, from 9 Megabits per second in 2011 to 34 Mbps in 2016.

Video is the biggest chunk out of the overall rapidly expanding pie.

By 2016, 1.2 million video minutes — the equivalent of 833 days, or more than two years — are expected to travel the Internet every second, according to Cisco’s forecast. Monthly Internet video usage is projected to increase from 10.4 Petabytes (10.4 million Gigabytes) to 44.3 Petabytes by 2016.

Connected TVs are expected to account for more than 6% of global consumer Internet traffic by 2016 (up from 4% in 2011), and 18% of Internet video traffic (up from 7% in 2011). That shows that Internet-enabled TVs are becoming a viable option for many consumers, Sumits said.

“Generally, we’re not seeing the traffic becoming more symmetric,” she said. “HD video downloads are keeping it pretty asymmetric toward the downstream.”

Meanwhile, file sharing will continue to swell in raw numbers. By 2016, global peer-to-peer traffic is projected to account for 54% of global consumer Internet file-sharing traffic, down from 77% in 2011. In terms of volume, however, the amount of peer-to-peer traffic is expected to increase from a rate of 4.6 Exabytes per month in 2011 to 10 Exabytes per month by 2016.

Operators’ implementation of data-usage caps and consumption-based pricing will start to flatten out the rate of IP traffic growth — but only slightly, Sumits predicted.

On the fixed-broadband side, “we are expecting a continued tapering of the overall traffic growth,” she said, thanks partly to bandwidth caps and partly to the overall large volume of data. Previously, the Cisco VNI forecast a compound annual growth rate of 32% for 2010-15; it is forecasting 29% CAGR for 2011- 2016.

Usage caps “should have an impact on the amount of traffic consumed by the top 1% of customers,” Sumits said, noting that the top percentile of fixed-line consumers consistently generates more than 20% of total IP traffic.

Comcast, for example, last month said it will eliminate its 250-Gigabyte usage cap to test a new usage-based pricing system for broadband users who use more than 300 GB of data per month.

Other findings from Cisco’s latest VNI forecast:

Wi-Fi connections will represent more than half of the world’s Internet traffic by 2016;

Nearly 18.9 billion network devices will be attached to IP networks by 2016 — almost 2.5 connections for each person on earth — compared with 10.3 billion in 2011;

IPv6-capable devices will number 8 billion (for both fixed and mobile devices) by 2016, up from 1 billion in 2011;

Mobile Internet data traffic is forecast to increase 18 times from 2011 to 2016, to 10.8 Exabytes per month (130 Exabytes annually); and

Business Internet users are projected to grow from 1.6 billion in 2011 to 2.3 billion by 2016. Cisco’s VNI, established in 2007, is based on a combination of analyst projections, in-house estimates and forecasts, and direct data collection. The report aggregates data from multiple researchers, including SNL Kagan, Ovum, IDC, Frost & Sullivan, Gartner, ABI and Nielsen.