Fixed Broadband Traffic Growth Is Slowing

Fixed Broadband Traffic Growth Is Slowing

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Explosive growth in consumer broadband Internet traffic is coming to an end, according to Strategy Analytics. Their report predicts that annual growth in consumer broadband Internet traffic will decline by 82 percent in 2018 – 2028.

Since 1983, Nielsen’s Law has accurately predicted that the data rate of the highest available broadband service tier for cable consumers grows at a rate of 50 percent per year. This is sometimes taken as a proxy for both broadband service in general and for consumer demand. According to conventional wisdom, it will continue with no end in sight. This appears no longer to be true.

“It should be no surprise that traffic growth is declining. After all, nothing grows forever. Growth in broadband Internet traffic was driven by a handful of phenomena, most recently the rise of streaming video. As consumers become saturated, we have seen no evidence of another driver to replace it. Not 4K (UHD) or 8K (UHD2) video. Not Augmented Reality. Not Virtual Reality. Not streaming or console games. Not Smart Homes. Broadband Internet is a maturing business, and the industry has to plan for that,” said author of the report, Strategy Analytics Senior Analyst Dan Grossman.

“We see little evidence to suggest that a critical mass of consumers is likely to require more than 100-300 Mbps any time in the next 10 years. There will be many reasons why service providers will need to offer higher headline rates, but the days of prioritizing investment in ‘speeds and feeds’ are coming to an end, to be replaced by a need to focus on latency, reliability, and customer service as sources of differentiation,” added Service Director at Strategy Analytics Phil Kendall.

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