Forecasting the growth of the Internet Michael Minges

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 Growth Rate 1990 -97 l Global phenomenon l Growing market l Revenue potential “…the most promising new economic opportunity in decades. ” —Bill Clinton Source: ITU.

What Internet numbers are important? l Network size l Market value l Traffic

Network size Singapore Internet Profile 1997 l Host computers ð Physical connections l Subscribers ð Paying customers l Users ð People accessing 500’ 000 Users 267’ 400 Subscribers 57’ 600 Hosts 1. 9% 8. 6% 16. 1% Percent of population Source: TAS, Nielsen, Network Wizards.

Internet hosts l “Tight” definition (IP address) l “Scientific” method l Regular surveys: Internet hosts, world 29. 7 m 5. 07 Network Wizards Twice a year counts of all hosts RIPE Monthly counts of European hosts l Marks minimum size of Internet 0. 06 0. 313 m Source: ITU adapted from Network Wizards.

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

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

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

Internet hosts: Micro variables Telephone lines per 100 people ð ð Income Telephone lines PCs Age, education & language Japan Singapore Hongkong Australia Korea Taiwan Malaysia Thailand Philippines Indonesia China India GDP per capita l Determinants of Internet penetration: Internet hosts per 1’ 000 inhabitants Hongkong Singapore Japan Australia Korea Taiwan Malaysia Thailand China Philippines India Indonesia Internet hosts per 1’ 000 inhabitants R 2=0. 56 R 2=0. 45

Internet users: How many online? Internet Users World, millions 120 6 Asia. Pacific 16% Users per host 2 20 1 0 0 Source: MIDS. Jan-98 40 Jan-96 3 Jan-94 60 Jan-92 4 Jan-90 80 Users (m) 5 Users per host 100 Africa & Middle East 1% Europe 20% Internet Users May 1998 119. 5 million South America 6% Canada & USA 59% Source: NUA Surveys.

Internet users: Guesswork? l Loose definition makes estimating Internet users difficult l Wide variation in estimates l Previously multipliers, now surveys “There is no way to determine how many users are on the net, besides making guesses and estimates. ” — Network Wizards Internet Users Millions Source: ITU adapted from NUA Internet Surveys.

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

Internet commerce Web revenues US$ billion l Equipment & software for building the Internet l Charges for accessing the Internet l Advertising l Sales of products and services over the Internet Source: Activ. Media.

Internet Telephony: Threat or opportunity? l l The Economist May 2 nd 1998 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

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

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

Summary l “It is not possible to determine the exact size of the Internet, where hosts are located, or how many users there are. ” — Network Wizards

www. itu. int/ti