Fixed Broadband Traffic Growth Shows Signs of Slowing, New Findings Reported From Strategy Analytics

Strategy Analytics finds that explosive growth in consumer broadband Internet traffic is coming to an end.
Service reports predict that annual growth in consumer broadband Internet traffic will decline by 82 percent in 2018 – 2028.
It appears no longer to be true that the data rate of the highest available broadband service tier for cable consumers grows at a rate of 50 percent per year.

Strategy Analytics finds that explosive growth in consumer broadband Internet traffic is coming to an end. The Strategy Analytics Service Provider Strategies (SPS) service report, “Is Fixed Broadband Traffic Growth Slowing Down?,” 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.

According to Strategy Analytics Senior Analyst Dan Grossman, the author of the report, “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.”

According to Service Director Phil Kendall, “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.”

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