The global economy now appears headed for negative growth in 2020 because of the Covid-19 pandemic, according to the Economist Intelligence Unit. What precisely that means for most communications service providers is not clear, however.
Friday, March 27, 2020
Global Recession Now Inevitable, Economist Intelligence Unit Says
Gary Kim has been a digital infra analyst and journalist for more than 30 years, covering the business impact of technology, pre- and post-internet. He sees a similar evolution coming with AI. General-purpose technologies do not come along very often, but when they do, they change life, economies and industries.
Airline Industry Could Lost 80% of International Travel Next 9 Months
Coronavirus could cost airlines at least 650 million passenger trips, because of Coronavirus, over the next nine months. This is a drop of 80 percent previously expected, according to Juniper Research.
Significantly, after modeling both medium-impact and high-impact scenarios, Juniper Research now believes a low impact is now not possible.
The high impact scenario assumes that a severe disruption to international travel will continue for nine months, with travel restrictions and a reduced demand for international travel continuing.
Gary Kim has been a digital infra analyst and journalist for more than 30 years, covering the business impact of technology, pre- and post-internet. He sees a similar evolution coming with AI. General-purpose technologies do not come along very often, but when they do, they change life, economies and industries.
Fixed Network Internet Access Prices are Remarkably Consistent Globally
One often hears it argued that U.S. consumers already pay the highest prices for mobile data globally. Of course, that statement has to be placed in context. Consider fixed network internet access. A casual glance would suggest that prices vary substantially.
That also would--at first glance--to be the case for mobile data.
Matters are different when one adjusts for differences in general price levels in each country. The cost of living, for example, is highest in North America, Japan and Korea, Australia and New Zealand and Western Europe. Not surprisingly, costs for almost any product are higher in those countries, on a global basis.
However, adjusting for such differences, it turns out that consumer fixed network internet costs, in real terms, are about $50 per month, globally.
Mobile data retail prices, likewise, are lowest, in real terms, in developed nations, including the United States.
Nominal prices are one thing; real prices, adjusted for local cost of living, is something else. In real terms, fixed or mobile internet access costs about the same, most places globally.
Gary Kim has been a digital infra analyst and journalist for more than 30 years, covering the business impact of technology, pre- and post-internet. He sees a similar evolution coming with AI. General-purpose technologies do not come along very often, but when they do, they change life, economies and industries.
Thursday, March 26, 2020
Enterprise Execs Expect IT, Communications Spending to Drop because of Covid-19
Enterprise budgets almost always bear a direct relationship to revenue expectations, so it comes as no surprise that 61 percent of respondents to a new survey say their information technology budgets are affected by the Covid-19 pandemic, according to a survey undertaken by Dresner Advisory Services.
It is not hard to guess that the primary change is smaller budgets, as spending virtually always is reduced in a recession, especially when a steep decline in revenue is anticipated. And that is the inevitable result when most parts of an economy are deliberately shut down.
The information technology industry alone might see a revenue dip of possibly 1.4 percent or so if the annual growth rate falls to about two percent over 2019 levels. Prior to the pandemic, Forrester Research had expected annual information technology spending to be in the 3.4 percent range.
But that is based on a recovery in the second half of 2020. If a recession happens, Forrester says there is a 50 percent chance that IT spending will decline by perhaps two percent for the full year.
In either a second-half 2020 recovery or recession, Forrester predicts computer and communications equipment spending will be weakest, with potential declines of five percent to 10 percent.
Technology consulting and systems integration services spending will be flat in a temporary slowdown and could drop by up to five percent if firms cut back on new projects.
Software spending growth will slow to between two percent and four percent, best case; zero growth if a recession lingers.
About 89 percent of respondents say operations are affected, while 75 percent say marketing is affected, according to the Dresner survey.
About 93 percent of respondents in education say the pandemic has had impact, largely because all classes essentially now are taught online only. Some 88 percent of consulting firms report project cancellations or delays. Fully 83 percent of respondents in the advertising industry report impact, most likely because advertising is early to be cut back in any recession.
Healthcare is affected at least in part because of increased strain on facilities and staff. But more than 53 percent of respondents in every industry segment reported impact.
Gary Kim has been a digital infra analyst and journalist for more than 30 years, covering the business impact of technology, pre- and post-internet. He sees a similar evolution coming with AI. General-purpose technologies do not come along very often, but when they do, they change life, economies and industries.
Wednesday, March 25, 2020
Videogame Play is Not Breaking the Internet
With so many people now working at home, with schools closed, entertainment video and game play bandwidth consumption are new concerns for internet service and app providers. Some note that it is streaming video that represents the single biggest source of new demand on access networks.
Streaming Netflix at high-definition settings uses up to 3000 MB per hour. Netflix in 4K will use even more. A virtual Zoom meeting, using 1080p settings consumes 1.8 Mbps, or about 810 MB per hour.
Fortnite and Minecraft both reportedly use about 100 megabytes of data per hour, according to Chris Hoffman, How-To Geek editor. Most games likely consume 40 MB to 150 MB per hour.
The point is that online games do not use as much bandwidth as some might think.
Game downloads are another issue. Many digital game downloads are huge. For example, Red Dead Redemption 2 is a 105 GB download. But many are less demanding of bandwidth to support the app download. Fortnite is a 35 GB download, for example.
Gary Kim has been a digital infra analyst and journalist for more than 30 years, covering the business impact of technology, pre- and post-internet. He sees a similar evolution coming with AI. General-purpose technologies do not come along very often, but when they do, they change life, economies and industries.
Tuesday, March 24, 2020
Covid-19 is Not "Breaking the Internet"
The sudden adoption of “stay at home” policies in many countries will provide a “stress test” for communications networks at the same time, revealing which networks are resilient, and which are less so. So far, there are few reports of problems, though perhaps it is inevitable that speculation about breaking the internet will prove irresistible storylines.
The real story is the absence of reports about actual service degradation. A few service providers already have released data on the spike in usage.
Verizon reported that between March 12 and March 19, 2020, total voice usage on Verizon networks was up 25 percent, with the primary driver being use of conference call services.
Cisco reports that traffic on the Webex backbone connecting China-based Webex users to their global workplaces has increased as much as 22 times since the Covid-19 outbreak began. During the same time period, Webex also saw four to five times as many users in Japan, South Korea and Singapore, with the average time spent on Webex video meetings doubling among users in those countries.
Mobile voice usage was up 10 percent, while call duration was up 15 percent. Presumably much of that is related to the use of conference calling services. Still, voice traffic requires so little bandwidth that none of that would affect user experience overall.
Virtual private network traffic was up 25 percent and web traffic was up 22 percent.
From March 9 to March 16, 2020, Verizon noted a 75 percent increase in gaming; a 12 percent increase in video streaming and web streaming boosts of just under 20 percent.
On March 19, OpenVault reported that data usage during business hours grew more than 41 percent. Average usage during the 9 am-to-5 pm daypart has risen to 6.3 GB, 41.4 percent higher than the January figure of 4.4 GB.
Peak hour (6 pm–11 pm) usage has risen 17.2 percent from five gigabytes per subscriber in January to 5.87 GB in March.
Overall daily usage has grown from 12.19 GB to 15.46 GB, an increase of 26.8 percent.
European Community networks, on the other hand, might be less resilient, judging by the EC request that streaming services reduce resolution to limit bandwidth consumption.
A new analysis by Nokia also confirms unprecedented growth of internet traffic as a result of government policies keeping workers and students at home because of the Covid-9 virus pandemic.
Most networks have seen 30 percent to 45 percent growth over a year, with Covid-19 period increases of perhaps 20 percent to 40 peak increases, typically in the evening hours over the past four weeks.
“So far, networks appear to be meeting demand, but they were designed to grow that much in a year, not in days,” Nokia says.
The edge and peering links of Content Delivery Networks (CDNs) seem to have enough headroom, but there is stress mostly on the aggregation networks and service edge routers, where demand may be reaching capacity maximums, Nokia says.
“We are also seeing unprecedented growth in latency-sensitive applications during business hours,” Nokia says, including 300 percent growth in teleconferencing apps in the United States, and 400 percent growth in gaming.
Gary Kim has been a digital infra analyst and journalist for more than 30 years, covering the business impact of technology, pre- and post-internet. He sees a similar evolution coming with AI. General-purpose technologies do not come along very often, but when they do, they change life, economies and industries.
Monday, March 23, 2020
Nokia Sees Covid-19 Traffic Spikes
A new analysis by Nokia confirms that unprecedented growth of internet traffic as a result of government policies keeping workers and students at home because of the Covid-9 virus pandemic.
Most networks have seen 30 percent to 45 percent growth over a year, with Covid-19 period increases of perhaps 20 percent to 40 peak increases, typically in the evening hours over the past four weeks.
“So far, networks appear to be meeting demand, but they were designed to grow that much in a year, not in days,” Nokia says.
The edge and peering links of Content Delivery Networks (CDNs) seem to have enough headroom, but there is stress mostly on the aggregation networks and service edge routers, where demand may be reaching capacity maximums, Nokia says.
“We are also seeing unprecedented growth in latency-sensitive applications during business hours,” Nokia says, including 300 percent growth in teleconferencing apps in the United States, and 400 percent growth in gaming.
Gary Kim has been a digital infra analyst and journalist for more than 30 years, covering the business impact of technology, pre- and post-internet. He sees a similar evolution coming with AI. General-purpose technologies do not come along very often, but when they do, they change life, economies and industries.
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