In Business Model, Internet Access, Mobile

What is the strategic value of the fixed network in a mobile-dominated communications market? Ironically enough, backhaul. One way of looking at the volume of access is to note that, in 2013, about 59 percent of all traffic used “wireless” access. But that might overstate “mobile” and understate “fixed” access.

In 2013, 41 percent of traffic used a classic “fixed” connection, while 55 percent used Wi-Fi, according to Cisco. By 2018, perhaps 61 percent of traffic will be generated by  Wi-Fi connections, 15 percent by the mobile networks and 24 percent by the fixed network.

New research has forecast that mobile data traffic will approach almost 197,000  petabytes by 2019, according to Juniper Research. Video will account for most of that traffic.

Juniper Research predicts that video traffic on smartphones will increase by nearly eight times between 2014 and 2019.

About 41 percent of that traffic will be carried over mobile networks in 2019. The rest will be accessed from a fixed network, typically using Wi-Fi.

Video currently accounts for around 60 percent of global IP traffic and, in some developed markets, this proportion is likely to exceed 70 percent  in two to three years.

But if one assumes Wi-Fi is the default “in building” distribution, then as much as 96 percent of device traffic used an untethered connection. In 2018, the fixed network, despite mobile access growth, might still represent as much as 85 percent of all device Internet access.

In other words, the most important, and most dominant role for fixed networks is backhaul of Internet traffic.

The distinction between “mobile” and “fixed,” in that sense, is almost moot. By 2018, only 15 percent of traffic volume will directly use the mobile networks.

All the rest will be backhauled through the “fixed” network.

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