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Credit: The Bureau of Communications and Arts Research of Australia (BCAR)

Credit: The Bureau of Communications and Arts Research of Australia (BCAR)

Future trends of data and bandwidth demand in Australia

On Feb 27, the Bureau of Communications and Arts Research of Australia (BCAR) has released a working paper that examines the demand for fixed-line broadband in Australia over the next decade.

The working paper titled Demand for fixed-line broadband in Australia identifies the factors that drive household demand for data and the rate at which it is transmitted—known as bandwidth—and how this may change over time. The report is the first in an annual series.

The BCAR has forecast Australian households’ demand for data and bandwidth delivered over fixed-line services over the next decade. It identifies the drivers of demand for data and bandwidth and forecasts how this demand will change.

Often compared to the flow of traffic on a road, bandwidth is the rate at which information is transmitted over a line or through a circuit. It is measured in bits per second and can be used to refer to the capacity of a line, or to the requirement of applications. The capacity of a line determines the ability for households to use applications requiring relatively large amounts of data, such as streaming video or downloading files.

Increasing demand for data and bandwidth

Australia’s digital transformation has driven growth in a vast range of applications and platforms requiring an increasing use of data. According to the report, the monthly volume of data demand from the average Australian household is forecast to increase from 95 gigabytes (GB) in 2016 to 420 GB in 2026.

The increasing demand for data as well as fast and reliable broadband services, particularly at peak times, is a result of Australians being enthusiastic adopters of digital technology.

Developments in technology will contribute significantly to this growth. Given the rapid take-up of platforms and over-the-top services, households will spend more of their available leisure time using data-intensive applications such as ultra-high definition online video-on-demand (VOD) services and new technologies such as virtual reality (VR).

Very often, more than one device is used at the same time. Demographic factors such as rising real incomes and the ageing of younger and connected generations will also contribute to increased data demand.

Households that use the most data are most likely to demand the most bandwidth at peak periods, although the frequency and duration of this peak will vary between households. Peak bandwidth demand for the highest usage households is forecast to increase from between 11–20 megabits per second (Mbps) in 2016 to between 20–49 Mbps in 2026.

For households that already demand significant amounts of bandwidth, the volume of data used is likely to grow at a faster rate than their bandwidth demand. These households are assumed to already have a range of data-intensive technology in their homes and use the maximum number of devices possible at a single point in time in the peak period.

However, only 2% of households are expected to demand more than 49 Mbps in bandwidth - 98% of households are estimated to demand less than that in 2026.

Components of cumulative data download growth in Australia 2016–2026 (Credit: BCAR)

Type of technology driving data and bandwidth demand

In the forecast of BCAR, Australian households will spend more time watching video over the internet while content providers will also shift from SD or HD video to 4K and 8K content that is more data intensive. This means that both SD and HD video are expected to contribute less to overall demand in 2026 when compared to 2016. Further improvements in compression technology mean that the bandwidth requirements for each video type decline over time.

The second largest contributor to total growth in 2026 is expected to be data generated by Internet of Things (IoT) devices. While the impact of IoT is relatively small until 2021, it increases between 2021 and 2026—contributing over 15% of total growth during that period.

This growth in IoT is due to the increase in the number of devices in each household and the data needs of the average IoT-connected device. While each device does not necessarily require a large amount of bandwidth, increasing data use results from the significant increase in the number of devices owned by each household over the next decade.

However, the report also emphasised that its forecasts for data usage are sensitive to how quickly households adopt technologies, with a faster than expected take-up of online video likely to have the most significant impact on data demand.

Peak household bandwidth demand (2016 VS 2026) and NBN speed capability (Credit: BCAR)

National Broadband Network sufficient to meet the demand

The forecast shows that high usage households are typically couple families with children. These households are expected to become more concentrated in particular areas, such as on the fringes of major metropolitan areas or new growth areas on the fringe of cities characterised by new housing developments. Other factors such as income and the quality of existing infrastructure will also affect the growth of bandwidth demand at a regional level.

“While consumers enjoy the advantages of mobility, this report highlights the role of fixed networks in meeting Australian households’ growing appetite for more data,” Minister for Communications Senator Mitch Fifield said.

Today, the average NBN connection downloads just under 200GB of data per month – almost 100 times as much as the average downloaded over mobile devices at around 2GB per month.

Despite rapid growth in this demand, the BCAR paper shows that in 2026 the fixed-line broadband needs of Australian households will be well served by the current infrastructure investment in National Broadband Network (NBN).

In a press statement made by the Department of Communications and the Arts, Minister Fifield stated that the Coalition’s rollout will ensure 90% of the NBN fixed-line footprint will deliver download speeds above 50Mbps, and all premises will be able to receive peak wholesale speeds of at least 25Mbps by 2020.

The BCAR will continue to monitor changes in demographics, technology and other factors each year to assess the impact on data and bandwidth demand. The research will be updated regularly to assess the impact of factors such as shifting demographics on changing data and bandwidth needs as Australians embrace new digital technologies.

The working paper can be downloaded here on the website of BCAR.

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