Opening Forum Speech

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
Network size
500000 Users

• Host computers
• Physical connections
• Subscribers
• Paying customers
• Users
• People accessing

267400 Subscribers
8.6
16.1
Percent of population
Source TAS, Nielsen, Network Wizards.
5
Internet hosts

• 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

Internet hosts, world
29.7m
5.07
0.06
0.313m
Source ITU adapted from Network Wizards.
6
Hosts How reliable?

• Network Wizards January 1998 methodology change
• Differences between Network Wizards and RIPE
• Where do hosts actually reside (e.g., .COM)?

Internet hosts million
Trend
32272
16322
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-breme
n.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 1000 inhabitants
R20.45
Hongkong
Singapore
Japan
Australia
Korea
Taiwan
Malaysia
Telephone lines per 100 people
R20.56
Thailand
China
Philippines
Indonesia
India
Internet hosts per 1000 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 usersGuesswork?
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 TelephonyThreat 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 telephonyDifferent modes

• Computer to computer Since 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
  providers 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