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Forecasting the growth of the Internet

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?. Compound Annual

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Forecasting the growth of the Internet

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  1. 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

  2. Why is Internet forecasting important? Compound Annual Growth Rate 1990-97 • Global phenomenon • Growing market • Revenue potential “…the most promising new economic opportunity in decades.” —Bill Clinton Source: ITU.

  3. What Internet numbers are important? • Network size • Market value • Traffic

  4. Singapore Internet Profile 1997 57’600 Hosts 1.9% Network size 500’000 Users • Host computers • Physical connections • Subscribers • Paying customers • Users • People accessing 267’400 Subscribers 8.6% 16.1% Percent of population Source: TAS, Nielsen, Network Wizards.

  5. Internet hosts Internet hosts, world 29.7m • “Tight” definition (IP address) • “Scientific” method • Regular surveys: Network WizardsTwice a year counts of all hosts RIPEMonthly counts of European hosts • Marks minimum size of Internet 5.07 0.06 0.313m Source: ITU adapted from Network Wizards.

  6. Hosts: How reliable? Internet hosts million • Network Wizards January 1998 methodology change • Differences between Network Wizards and RIPE • Where do hosts actually reside (e.g., .COM)? Trend 32’272 16’322 Actual 1-95 7-97 1/98 Source: Network Wizards.

  7. Internet hosts: High growth over? Internet Hosts World, millions Internet Hosts Asia-Pacific, millions Source: Network Wizards.

  8. Internet hosts: macro forecast Internet hosts millions Growth levels off High projection Peak of highest growth Trend S-Curve S-Curve error limit Source: Dr. Mario Hilgemeier http://tunix.is-bremen.de/~mhi/inetgrow.htm Source: ITU.

  9. Internet hosts: Micro variables Japan • Determinants of Internet penetration: • Income • Telephone lines • PCs • Age, education & language Singapore Hongkong Australia Korea Taiwan GDP per capita Malaysia Thailand Philippines Indonesia China India Internet hosts per 1’000 inhabitants R2=0.45 Hongkong Singapore Japan Australia Korea Taiwan Malaysia Telephone lines per 100 people R2=0.56 Thailand China Philippines Indonesia India Internet hosts per 1’000 inhabitants

  10. Internet users: How many online? Africa & Middle East 1% Internet Users World, millions 120 6 Asia- Pacific 16% Europe 20% Users per host 100 5 80 4 Internet Users May 1998 119.5 million 60 3 Users per host Users (m) 40 2 20 1 Canada & USA 59% 0 0 South America 6% Jan-94 Jan-90 Jan-92 Jan-96 Jan-98 Source: NUA Surveys. Source: MIDS.

  11. Internet users:Guesswork? Internet Users Millions • 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 Source: ITU adapted from NUA Internet Surveys.

  12. Users forecast Internet users World, million • Will grow faster than hosts • Limited by various variables (number of PCs, telephone lines, etc.) Source: ITU, MIDS.

  13. 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 Source: ActivMedia.

  14. Internet Telephony:Threat or opportunity? • 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 The Economist May 2nd 1998

  15. Internet Phone Gateway Computer Phone Gateway Computer Internet Phone Gateway Computer Public Switch Telephone Internet Phone Gateway Computer Phone Gateway Computer Telephone Public Switch Telephone Internet telephony:Different modes • Computer to computerSince 1994 • Conversation between two similarly equipped computer users via Internet • Computer to telephone Since 1996 • Internet user interconnecting with Public Telephone Network via an intermediaryservice provider (e.g., call-back company) or a service provider’s Website • Telephone to telephone Since 1997 • Telephone carrier routes telephone or fax message via a data network (Internet, frame relay) rather than viathe Public Telephone Network

  16. IP Telephony traffic forecast Source: Analysys (www.analysys.com).

  17. 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

  18. www.itu.int/ti

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