There is a sense of déjà vu when you read about the competing plans of Greg Wyler’s OneWeb and Elon Musk’s SpaceX to build a network of low earth orbit satellites to provide cheap broadband across the globe over the next few years. Memories of past failures from the late 1990s telecom bubble come to mind with these network plans. Names like Iridium, GlobalStar, Teledesic, and SkyBridge. Maybe, this time, the dreamers with access to billions can get it right!
You never know, there may even be a comeback for broadband over power-lines (not likely according to this article)!
I did come across the latest figures from Cisco in their “ The Zettabyte Era – Trends and Analysis” piece, as previously referenced in this post. As a reminder, gigabyte/terabyte/petabyte/exabyte/zettabyte/yottabyte is a kilobyte to the power of 3, 4, 5, 6, 7 and 8 respectively. Cisco continues to predict a tripling of global IP traffic from 2014 to 2019. The graphics below give some colour on the detail behind the predictions.
Split by consumer and business traffic with each further split by traffic type. Unsurprisingly consumer video traffic is dominating the consumer 24% CAGR.
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Growth in the US, Asia and Europe is driving the impressive 29% metro CAGR whilst Asia Pacific traffic is the prime driver for long-haul growth.
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The split by region shows the status quo will be maintained in terms of traffic breakdown with Central/Eastern Europe and the Middle East /Africa regions projected to have growth rates of 30%+ and 40%+ respectively as opposed to approx 20% in the main markets.
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Exabytes are reaching their zenith and by next year global IP traffic is predicted to exceed a zettabyte.
This blog represents my personal views and is not reflective of the views or opinions held by any company or employer I work for currently or have worked for in the past. The views expressed herein are based solely upon publicly available data. No views expressed herein should be taken as an endorsement to take any particular course of action in the markets. The basis of this blog is that different views should be expressed and readers make up their own minds on the what they believe and act accordingly.
deconstructingrisk 
Hi Mozoz,
I hope you are doing well. I’ve been a bit busy lately…
Cisco continues to predict a tripling of global IP traffic from 2014 to 2019.
I guess asking Cisco about future web traffic is akin to asking your barber whether you need a haircut. Agreed that web traffic will increase going forward: more stuff comes online, think Netflix, Google Music and friends which on top gives more opportunity for illegal downloads and file sharing. I am not sure whether I should believe in close to exponential growth, though.
As a side note, SpaceX should work a bit more on its rocket launching skills before trying to establish a satellite network… right now the burn rate looks a tad high to me.
Best,
Eddie
Hey Eddie, good to hear from you, can’t believe where the time has gone, I’m too busy for any meaningful blogging.
Hear what you say about Cisco, mind you independent analysts like Gartner haven’t exactly got a pristine record!!!
Love to hear your thoughts on market, Greece, ect when you get a chance.
Enjoy the summer.
M
I am on holiday right now so I should have a bit of time to sit and think :).
Marketwise… hhmm… I think Greece is a sideshow, they are toast either way. They should run out of physical cash within the next days which should force them them to issue IOUs which is the first step towards a parallel currency. I wonder for how long the ECB will sit back and watch… July 20th is D-Day. Really interesting is how Italy and France will react resp. their govies.
What is more important imho is Shanghai. They lost 10x Greece GDP in market value since July 30th. Which is quite a lot but only c. 20% in a market that more than doubled over the last twelve months. The government seems to be very nervous about this… you may now post your appartment as collateral to support your margin lending and various other things. Now you can really bet the house…
Btw, I don’t think that the Fed will raise rates anytime soon… too much money floating around, too much stuff on their balance sheet. If they wanted to tighten they could just stop reinvesting maturing bonds or, heaven forbid, sell some bonds in the market.
Just a few quick thoughts, happy to discuss whenever you have time.
All the best,
Eddie
Enjoy the holiday Eddie, should be focussing on tennis or something rather than the market!!!
I will try and read up some more on China, it just seems to me that a bad bubble burst is inevitable at some stage, whether it be property or stocks or other, in China as they grapple with their form of capitalism. At some stage the Party is not going to be able to contain the situation, they may get away with it again this time but even a limited form of capitalism dictates that the chickens have to come home … Not even the Party can contain the force of greed and fear!
Interesting thoughts on interest rates. Assuming Greece doesn’t blow up, I would of thought some small move in Q4 but I think you may have a better handle on the situation.
Keep the comments coming…
Have to run.
M
You know what? Now I have time to focus on the market 🙂
Looks like the Party managed to pull off a recovery but at a steep price. About half of the stocks in Shanghai and Shenzhen do not trade, directors must not sell shares for 6 months, everyone with some bucks left is forced to buy stocks… my guess is that this will end in tears.
Look at the CYN/JPY cross over the next weeks. Japan has been exporting deflation to the US and China for the last few months. If China uses its currency as a safety valve there is more to come for Dame Janet. In a world where competitive devaluation is still en vogue you don’t win a lot being the first mover… unless inflation comes your way big time and then it is too late.
Really looking forward how the Greek drama pans out. Since Tsip is now proposing what was impossible for him one week ago I suspect another trick. Probably their banks are bust if nothing happens. We shall see.
My 2 sunbeams for the time being.
Best
Eddie
Eddie, my latest post is inspired by your comments on competitive devaluations. FX is not an area I know too well so let me know what you think, I may have it back to front!!!
Your comments are always appreciated.
M
Talking about safety valves… China announced over the weekend that the trading band for the CNY will be widened, i.e. expected a lower USDCNY going forward. Right now it trades around 6.20 (coming from 9 iirc since China started liberating its exchange rate) and I wouldn’t be too surprised if it goes to 6.50 or so. Producer prices in China have been falling for the last three to four years, so I think there is some pressure building.
Which doesn’t bode well for my gold mine stocks…
Eddie