Forecasting the growth of the Internet Michael Minges, Telecommunication Development Bureau (BDT), International Telecommunication Union (ITU)
Market Forecasting in the Telecoms Industry, 25-27 May 1998, Hongkong
Why is Internet forecasting important?
Global phenomenon Growing market Revenue potential
Compound Annual Growth Rate 1990-97 6%
Telephone lines
Cellular subscribers
“…the most promising new economic opportunity in decades.” —Bill Clinton
52%
Internet hosts
Source: ITU.
87%
What Internet numbers are important? Network size
Market value
Traffic
Network size Singapore Internet Profile 1997
Host computers Physical connections
Subscribers Paying customers
Users People accessing
500’000 Users 267’400 Subscribers 57’600 Hosts 1.9% 8.6% 16.1% Percent of population Source: TAS, Nielsen, Network Wizards.
Internet hosts “Tight” definition (IP address) “Scientific” method Regular surveys: Hosts (m)
25
5.07 5
20
4
15
3
10
2
5
1
0.06 Jan-98
Jan-96
0.313m
0 Jan-94
0 Jan-92
Marks minimum size of Internet
6
Hosts (m) Per 1'000 people
Oct-90
RIPE Monthly counts of European hosts
29.7m
30
Per 1'000 people
Network Wizards Twice a year counts of all hosts
Internet hosts, world
Source: ITU adapted from Network Wizards.
Hosts: How reliable?
15
16’322
0
1/98
Source: Network Wizards.
Jan-98
5 Jan-97
32’272
Jan-96
10
Jan-95
7-97
20
Jan-94
1-95
Adjusted Old
25
Jan-93
Actual
30
Jan-92
China
Trend
Internet hosts million
Jan-91
Network Wizards January 1998 methodology change Differences between Network Wizards and RIPE Where do hosts actually reside (e.g., .COM)?
Internet hosts: High growth over? Internet Hosts World, millions 30
Hosts Growth
Source: Network Wizards.
25
Internet Hosts Asia-Pacific, millions 180% 160% 140%
20
120% 100%
15
80%
10
60% 40%
5
20%
0
0% 1994 1995 1996 1997
3.0
Hosts Growth
2.5
180% 160% 140%
2.0
120% 100%
1.5
80%
1.0
60% 40%
0.5
20%
0.0
0% 1994 1995 1996 1997
Internet hosts: macro forecast Internet hosts millions 250
Growth levels off
225 200
High projection 150
Peak of highest growth
100
Trend
50
Source: ITU.
Jul-02
Jul-01
Jul-00
Source: Dr. Mario Hilgemeier http://tunix.is-bremen.de/~mhi/inetgrow.htm
Jul-98
0
Jul-99
S-Curve S-Curve error limit
71 55 37
Internet hosts: Micro variables
Telephone lines per 100 people
Income Telephone lines PCs Age, education & language
Japan
Singapore Hongkong Australia Korea Taiwan Malaysia Thailand Philippines Indonesia China India
GDP per capita
Determinants of Internet penetration:
Internet hosts per 1’000 inhabitants
Hongkong Singapore Japan Australia Korea Taiwan Malaysia Thailand
China Philippines India Indonesia Internet hosts per 1’000 inhabitants
R2=0.56
R2=0.45
Internet users: How many online? Internet Users World, millions
120
6
AsiaPacific 16%
Users per host
2
20
1
0
0
Source: MIDS.
Jan-98
40
Jan-96
3
Jan-94
60
Jan-92
4
Jan-90
80
Users (m)
5
Users per host
100
Africa & Middle East 1% Europe 20%
Internet Users May 1998 119.5 million
South America 6%
Canada & USA 59%
Source: NUA Surveys.
Internet users: Guesswork?
Loose definition makes estimating Internet users difficult Wide variation in estimates Previously multipliers, now surveys “There is no way to determine how many users are on the net, besides making guesses and estimates.” — Network Wizards
Internet Users Millions 1.6 1.4 9/97 NASS COM
1.2 1.0
9/97 IDC
0.8 0.6 0.4 0.2 0.0
11/97 ABS Australia
11/97 Wired India
Source: ITU adapted from NUA Internet Surveys.
Users forecast Internet users World, million
ď Ź Will grow faster than hosts ď Ź Limited by various variables (number of PCs, telephone lines, etc.)
707 MIDS ITU 500 377 300
57 1.12
1989
1996
1999
Source: ITU, MIDS.
2000
Internet commerce Web revenues US$ billion
Equipment & software for building the Internet Charges for accessing the Internet Advertising Sales of products and services over the Internet
1'234
717
377 0.1 2.7 22 1995
1997
74
180
1999
2001
Source: ActivMedia.
Internet Telephony: Threat or opportunity?
The Economist May 2nd 1998
Price Quality Regulation Modes
“Future Public Networks will be IP based. Until recently we all have been putting Data over Voice Networks. Now we will be putting Voice over Data Networks.” —Jeff Pulver
Internet telephony: Different modes Computer to computer Since 1994 Conversation between two similarly equipped computer users via Internet
Internet
Phone Gateway Computer
Computer to telephone Since 1996
Internet
Internet user interconnecting with Public Telephone Network via an intermediary service provider (e.g., call-back company) or a service provider’s Website
Phone Gateway Computer
Public Switch
Telephone to telephone Since 1997 Telephone carrier routes telephone or fax message via a data network (Internet, frame relay) rather than via the Public Telephone Network
Phone Gateway Computer
Telephone
Internet
Phone Gateway Computer
Telephone
Phone Gateway Computer
Public Switch
Telephone
50'000 45'000 40'000 35'000 30'000 25'000 20'000 15'000 10'000 5'000 0
30% International IP call minutes
25%
% of international call minutes
25% 20%
46'870
15% 10% 5%
0.41% 325 1997
0% 1998
1999
2000 2001
2002
2003
Source: Analysys (www.analysys.com).
% International call minutes
Millions of call minutes
IP Telephony traffic forecast
Summary
“It is not possible to determine the exact size of the Internet, where hosts are located, or how many users there are.” — Network Wizards
www.itu.int/ti