Web bypass: delivering connectivity without the Internet
Deloitte predicts that by year-end 2012 over 80 percent of all wireless traffic going over short-range (under 10 meters) connections will likely be data; the volume of data carried over those connections will likely have doubled year-on-year, and that over one percent of all wireless data will likely be exchanged directly between devices instead of being routed through the Internet – a 100 percent year on year increase. Although wireless data traffic will likely still be dominated by cellular and Wi-Fi for the near future, short range wireless connection technologies are likely to double in bits carried every year through 2015 and most likely beyond220.
Short range wireless connections are far from new. In the 1990s, the most common approach to exchanging data directly between computers and mobile phones was via infrared (IR). This worked, but was slow, and required precise positioning: pairs of IR ports needed to be in each other’s line of sight.
Bluetooth, in all its iterations, offered an upgrade to infrared as a way to connect devices and has been used predominantly for voice communications, connecting hundreds of millions of phones to personal hands-free kits and to hands-free car kits. However Bluetooth has seldom been used for data.
In 2012, a spike in demand and an improvement in supply are likely to lead to a doubling in the volume of data sent via short range wireless networks.
Data demand from fixed and mobile subscribers continues to grow at a double digit rate. Growth in fixed network traffic is rising at such a pace – over 30 percent year-on-year – that over 100 million fixed broadband users may be migrated to a capped service in 2012221. Mobile users have already largely been moved over to caps, which in turn has caused a change in network behavior, as more and more data exchanged between mobile devices has been sent via Wi-Fi, a practice known as “Wi-Fi bypass” or “Wi-Fi offload”222.
Demand for data connectivity is likely to grow in line with the installed base of data-centric devices in the market. In 2012, tens of millions of tablets and hundreds of millions of computers223 and smartphones224 will likely be added to the world’s installed base of connected devices. Added to that, a growing number of media devices, from Internet connected TVs, and Wi-Fi radios (which receive at up to 300 Kbit/s) will likely further strain the Internet225. And that strain will likely grow, regardless of the connection to the Internet: wired, Wi-Fi or cellular.
Further, the growing number of devices owned by individuals and households is catalyzing the offer of services that harmonize data, such as music files, photos and videos, across all owned devices. The updating of all devices, if undertaken entirely via the Web, could represent significant additional traffic.
How can demand for connectivity be satisfied while also containing capital investment in access and core networks?
The answer is likely to lie in a greater use of short-range wireless connectivity, which will be increasingly used to exchange data directly between devices, rather than via the Web. This is a logical progression in the evolution of data connectivity. Much as data transmission from mobile networks does not necessarily need to go via cellular networks, file transfer between devices does not necessarily need to be routed via the Internet.
Exchanging files between groups of workers on the same project team, and working within the same project room; relaying media files to wireless speakers and displays; sending photos from a smartphone to a tablet computer or printers will likely all increasingly be undertaken using short range wireless technologies.
Web bypass will not just take data traffic off the Web: it will also catalyze the flow of data between devices in close proximity. Video files that are generally too large to send via even the most generous of e-mail services will now be sent between devices when they are within close proximity.
To meet this demand, a growing number of wireless technologies are likely to be promoted. Iterations of Bluetooth, wireless USB and further proprietary technologies are all being launched226.
But the biggest supply shock may simply be the ultimate disruptor – ease of use. Multiple short range technologies are becoming increasingly available, and they all have different capabilities in terms of power consumption, power up time and data transmission speeds. The short-range wireless technology that ends up becoming dominant may well be that which offers the best user interface, rather than the one with the best technology.
Networks offering high utility will always tend to become congested. As bottlenecks approach there are two solutions. One is to increase capacity, the other is to smooth or lower throughput. The capacity of public and private wireless networks, such as cellular mobile and Wi-Fi will keep expanding. But demand for data capacity appears to be growing at a faster pace – it may prove hard to build a network, based on a single technology that can cope with a doubling in demand every year – and still make money227.
Fortunately connectivity needs vary and so do network technologies. It is not optimal to use the same network technology for all communication needs. It is making less and less sense, for example, to use the Web as the default network for exchanging data between devices that are within close physical proximity.
Network operators should therefore consider Web bypass as a third approach to delivering wireless connectivity, in addition to cellular mobile and fixed broadband connected Wi-Fi. Operator differentiation is likely to become dependent on their ability to offer their customers an appropriate range of network technologies, and to manage most, if not all of the network deployment and network selection challenges. The network operator is becoming more and more a networks provider, and their value add will be in simplifying the underlying complexity of multiple co-existing network technologies.
Device vendors should evaluate all available short-range wireless connectivity options and determine which individual or multiple technologies to incorporate and promote. Battery usage and throughput may be key factors. Device vendors should also include software that determines which network technology is best to use for each type of communication, be this an e-mail or a video.
Short range wireless technology vendors are likely to need to work with device vendors, chipset vendors, app developers and other entities to ensure that their technology attains critical mass. But they should also note that there is likely to be room for more than one provider in this space.
Deloitte Canada, as referenced in videos, podcasts, or online materials related to TMT Predictions 2012, refers to Deloitte & Touche LLP, the Canadian member firm of Deloitte Touche Tohmatsu Limited.
220Assumptions on the doubling of volumes are based on the growing number of portable data devices (tablets, smartphones, computers, wireless speakers, wireless SD cards, wireless digital terrestrial TV transmitters etc...). Also note the assumptions on doubling of data volumes year-on-year in the following report: Cisco Visual Networking Index: Forecast and Methodology, 2010-2015, Cisco, June 2011: http://www.cisco.com/en/US/solutions/collateral/ns341/ ns525/ns537/ns705/ns827/white_paper_c11-481360_ns827_Networking_Solutions_White_Paper.html
221For further discussion, please see the 2012 Prediction: Here come more data caps: it’s the end of the (wire)line for unlimited Internet
222According to one study, 65 percent of a typical smartphone user’s data traffic can be off-loaded to Wi-Fi: Mobile Wi-Fi Offload, Light Reading, 7 April 2011: http://www.lightreading.com/document.asp?doc_id=206545; Mobile Data Offloading: How Much Can WiFi Deliver?, December 2010: http://research.csc.ncsu.edu/netsrv/sites/default/files/CoNEXT2010.pdf
223The installed base of PCs will increase to 2.3 billion by 2015 from 1.4 billion in 2010 by an average rate of 23.1%, Source: Forecast: PC Installed Base, Worldwide, 2006-2015, March 2011 Update, Gartner, 24 March 2011: http://www.gartner.com/id=1602818
224According to Gartner, the smart phone installed base was 800 million in 2011. The smart phone installed base will grow at an annual rate of 32 percent, according to Analysys Mason. Sources: CIO mission: Reimagine IT, CIO, 16 November 2011: http://cio.co.nz/cio.nsf/news/EB7766A85703C6CDCC25794A00116619 and Smartphone usage set to rocket to 1.7 billion by 2014, Independent, 27 April 2010: http://www.independent.co.uk/news/business/news/smartphone-usage-set-to-rocket-to-17-billion-by-2014-1955258.html
225The number of Internet connected devices is set to explode in the next four years to over 15 billion. Source: Cisco predicts Internet device boom, BBC News, 1 June 2011: http://www.bbc.co.uk/news/technology-13613536
226For example see: Qualcomm’s Peanut challenges ZigBee, Bluetooth for control of your personal area network next year, Computerworld data cited in engadget, 24 September 2010: http://www.engadget.com/2010/09/24/qualcomms-peanut-challenges-zigbee-bluetooth-for-control-of-yo/; Outlook: The future of Bluetooth is High-Speed, Low-Power, Smart and Ready, the:unwired, 12 December 2011: http://www.theunwired.net/?item=outlook-the-futureof-bluetooth-is-high-speed-low-power-smart-and-ready&category=general-news&category=general-news&6045 ; WiGig Alliance hits new alliance in race to multi-gigabit wireless, v3.co.uk, 13 December 2011: http://www.v3.co.uk/v3-uk/news/2131879/wigig-alliance-hits-milestone-race-multi-gigabit-wireless; Wi-Fi Direct and DLNA get friendly, make streaming media a little bit easier, engadget, 16 November 2011,: http://www.engadget.com/2011/11/16/wifidirect-and-dlna-get-friendly-make-streaming-media-a-little/
227Cellular mobile networks in the United States are already operating at 80 percent capacity; The global average peak network utilization is 65 percent and estimated to reach 70 percent in 2012. Western European networks are at 56 percent and growing. Source: Credit Suisse: Wireless network utilization levels globally are at threshold levels, Fierce Wireless, 18 July 2011: http://www.fiercewireless.com/story/credit-suisse-report-us-wireless-networks-running-80-total-capacity/2011-07-18