Forecasting the growth of the Internet Michael Minges, Telecommunication Development Bureau (BDT), International Telecommunication Union (ITU) Market Forecasting in the Telecoms Industry, May 1998, Hongkong

Why is Internet forecasting important? Global phenomenon Growing market Revenue potential Compound Annual Growth Rate Source: ITU. …the most promising new economic opportunity in decades. Bill Clinton

What Internet numbers are important? Network size Traffic Market value

Network size Host computers Physical connections Subscribers Paying customers Users People accessing Subscribers Hosts 1.9% Users Source: TAS, Nielsen, Network Wizards. Singapore Internet Profile % Percent of population 16.1%

Internet hosts Tight definition (IP address) Scientific method Regular surveys: Network Wizards Twice a year counts of all hosts RIPE Monthly counts of European hosts Marks minimum size of Internet Internet hosts, world Source: ITU adapted from Network Wizards m m

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 Source: Network Wizards Trend Actual /98

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

Internet hosts: macro forecast Peak of highest growth Growth levels off Source: Dr. Mario Hilgemeier Internet hosts millions S-Curve Trend High projection S-Curve error limit Source: ITU.

Internet hosts: Micro variables India China Indonesia Philippines Malaysia Thailand Japan Taiwan Korea Australia Hongkong Singapore Internet hosts per 1000 inhabitants GDP per capita India China Indonesia Philippines Thailand Malaysia Australia Korea Singapore Taiwan Hongkong Japan Telephone lines per 100 people Internet hosts per 1000 inhabitants Determinants of Internet penetration: Income Telephone lines PCs Age, education & language R2=0.45 R2=0.56

Internet users: How many online? Jan-90Jan-92 Jan-94 Jan-96Jan Users (m) Users per host Source: MIDS. Users per host Internet Users World, millions Source: NUA Surveys. Africa & Middle East 1% Canada & USA 59% Europe 20% Asia- Pacific 16% South America 6% Internet Users May million

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

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

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

Internet Telephony: Threat or opportunity? Price Quality Regulation Modes The Economist May 2nd 1998 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

Computer to computerSince 1994 Conversation between two similarly equipped computer users via Internet Computer to telephoneSince 1996 Internet user interconnecting with Public Telephone Network via an intermediary service 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 via the Public Telephone Network Internet telephony: Different modes Phone Gateway Computer TelephonePublic Switch Internet Phone Gateway Computer

IP Telephony traffic forecast Source: Analysys (

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