Keeping an eye on Alibaba Cloud, Aliyun – Part 1

Alibaba's Jack Ma made headlines across the world last week by laying out a plan for rapid global expansion of China's e-commerce behemoth. In an Investor Conference held at the company's Xixi headquarters in Hangzhou, China, Ma made the bold claim that Alibaba could reach $1 trillion in gross merchandise value by 2021 by becoming the primary online store for 2 billion people, as well as by expanding into new areas, one of which is the international public cloud services business. While Alibaba's investor event was overshadowed somewhat by the news that Amazon will spend $13.7 billion in cash to acquire Whole Foods, the premium U.S. grocery store chain, Jack Ma unveiled a strategy with clear potential to disrupt the cloud market.

Meanwhile, business at Alibaba Group (NYSE: BABA) is 'fantastic' and is only going to get better this year, according to the company CFO. For the most recent fiscal quarter ended March 31, 2017, the company reported revenue of RMB 38,579 million ($5,605 million), an increase of 60% year-over-year, including:

•   Revenue from core commerce of RMB31,570 million ($4,587 million), up 47% year-over-year.

•   Revenue from cloud computing of RMB 2,163 million ($314 million), up 103% year-over-year.

•   Revenue from digital media and entertainment of RMB 3,927 million ($571 million), up 234% year-over-year.

Growth at the parent company is primarily being driven by the steady increase in active buyers on its ecommerce platforms, both in numbers and in the value of goods and services being transacted. Annual active buyers reached 454 million, an increase of 31 million from the 12-month period ended on March 31, 2016. Mobile monthly active users (MAUs) on Alibaba Group’s China retail marketplaces reached 507 million in March, up 97 million over March 2016. Gross merchandise volume (GMV) transacted on Alibaba’s China retail marketplaces in fiscal year 2017 was RMB 3,767 billion ($547 billion), up 22% compared to RMB 3,092 billion in fiscal year 2016.

Alibaba Cloud, or Aliyun as it is known in Chinese, is firmly established as the leading infrastructure-as-a-service (IaaS) cloud in mainland China and is moving rapidly to become a Platform-as-a-Service (PaaS) provider and a Software-as-a-Service (SaaS) retailer. Some important Aliyun metrics emerged from the Investor presentation, including (with additional commentary):

·         Public cloud is growing: based on Gartner's figures from March 2017, Aliyun estimates the global public cloud market will amount to $245 billion in 2017, growing to $436 billion in 2021, a 15.9% CAGR.

·         China’s public cloud market is growing even faster, with Gartner figures showing China’s public cloud market, valued at $14 billion this year, growing to $25 billion in 2021, a 17.2% CAGR; by 2021, China’s share of the global public cloud market would still be under 6%, which seems odd given the country's share of global GDP is much higher and that ecommerce, social media and mobile technologies are booming in China - why so low versus the U.S. market?

·         Aliyun cited figures from IDC Tracker 2016 H1/H2 Global Cloud Market (IaaS), indicating it currently is the No.4 player in public cloud services worldwide, but with only a 3.2% share; No.1 was AWS, $8.4 billion, 46.1% share; No. 2 Microsoft, $1.4 billion, 7.6% share; No.3 IBM, $1.0 billion, 5.8% share; No.4 Alibaba, $0.57 billion, 3.2% share; No.5 Google, $0.519 billion, 2.9% share.

Clearly, AWS is dominating the public cloud market, especially in the U.S. The other U.S. public cloud players are investing aggressively to catch up and they too seem to have ambitions that reach to the sky. Alibaba's Jack Ma has previously been quoted in the press as saying that Alibaba would catch and surpass Amazon. When it comes to cloud services at least, this will be extremely difficult given its current 3.2% share versus AWS’ 46.1% share, and a capex budget that appears decisively smaller.

In its home market of China, Aliyun's IaaS revenue is equivalent to the next seven players combined. The numbers cited in IDC Tracker 2016 H1/H2 Global Cloud Market are as follows:

·         No.1 – Alibaba Group, $587 million, 40.7% market share

·         No.2 - China Telecom, $123 million, 8.5%

·         No.3 – Tencent, $106 million, 7.3%

·         No.4 – Kingsoft, $87 million, 6.0%

·         No.5 – Ucloud, $79 million, 5.5%

·         No.6 – Microsoft, $72 million, 5.0%

·         No.7 – China Unicom, $67 million, 4.6%

·         No.8 – AWS, $55 million, 3.8%

In addition, as of March 31, 2017 Aliyun had 874,000 paying customers, had 15 data centres worldwide and had 186 cloud service offers. It also claims a 96.7% retention rate amongst its top paying customers in Q1 2017 compared to a year earlier.

Over one-third of China’s Top 500 companies are on Alibaba Cloud, including China's Public Safety Bureau (PSB), CCTV, Sinopec, Sina Weibo, Xinhua News Agency,Toutiao, Geely, Mango TV, CEA, Quanmin Live, Panda TV and DJI, while two-thirds of Chinese Unicorn companies are on Alibaba Cloud. Global Software-as-a-Service (SaaS) now available on Aliyun include Accenture, SAP, Docker, here, SUSE, Haivision, Wowza, AppScale, AppEX, Hillstone, Checkpoint Software Technologies, Hitachi Data Systems and Red Hat.

Aliyun’s Computing Conference 2016 was attended by over 40,000 developers in person, with more than 7 million viewers online. At its investor conference, Aliyun also disclosed a number of major international brands that are now using its services, including Schneider Electric, Shisheido, Philips, Nestle and Vodafone, which is a good start. Nevertheless, attracting international companies will be harder, first, because Alibaba has only just recently begun building data centres outside of China, and two, they will be much less known and trusted than established brands such as IBM.

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AT&T to launch software-based 10G XGS-PON trial

AT&T announced it will conduct a 10 Gbit/s XGS-PON field trial in late 2017 as it progresses with plans to virtualise access functions within the last mile network.

The next-generation PON trial is designed to deliver multi-gigabit Internet speeds to consumer and business customers, and to enable all services, including 5G wireless infrastructure, to be converged onto a single network.

AT&T noted that XGS-PON is a fixed wavelength symmetrical 10 Gbit/s passive optic network technology that can coexist with the current GPON technology. The technology can provide 4x the downstream bandwidth of the existing system, and is as cost-effective to deploy as GPON. As part of its network virtualisation initiative, AT&T plans to place some XGS-PON in the cloud with software leveraging open hardware and software designs to speed development.

AT&T has worked with ON.Lab to develop and test ONOS (Open Network Operating System) and VOLTHA (Virtual Optical Line Terminator Hardware Abstraction) software. This technology allows the lower level details of the silicon to be hidden. AT&T stated that it has also submitted a number of open white box XGS OLT designs to the Open Compute Project (OCP) and is currently working with the project to gain approval for the solutions.

The company noted that interoperability is a key element of its Open Access strategy, and prompted the creation of an OpenOMCI specification, which provides an interoperable interface between the OLT and the home devices. This specification, which forms a key part of software-defined network (SDN) and network function virtualisation (NFV), has been distributed to standards and open source communities.

http://about.att.com/story/xgs_pon_broadband_field_trial.html

• AT&T joined OCP in January 2016 to support its network transformation program. Earlier this year at the OCP Summit Edgecore Networks, a provider of open networking solutions and a subsidiary of Accton Technology, announced design contributions to OCP including a 25 Gigabit Ethernet top-of-rack switch and high-density 100 Gigabit Ethernet spine switch. The company also showcased new open hardware platforms.
• At the summit, Edgecore displayed a disaggregated virtual OLT for PON deployment at up to 10 Gbit/ based on the AT&T Open XGS-PON 1 RU OLT specification that was contributed to the OCP Telco working group.
• Edgecore's ASFvOLT16 disaggregated virtual OLT is based on the AT&T Open XGS-PON 1 RU OLT specification and features Broadcom StrataDNX switch and PON MAC SOC silicon, offering 16 ports of XGS-PON or NG-PON2, with 4 x QSFP28 ports and designed for next generation PON deployments and R-CORD telecom infrastructure.

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Ciena teams with University of Waterloo

Ciena announced that it is working with engineering researchers at the University of Waterloo to develop solutions to help network operators and Internet providers address to the ever increasing demand for faster data transmission over the Internet.

The partners stated that the research relationship has received funding support from the Natural Sciences and Engineering Research Council of Canada (NSERC).

A key area of the University of Waterloo's partnership with Ciena focuses on realising the maximum possible capacity from the optical cables that run under the oceans and which handle around 95% of intercontinental communications, including an estimated $10 trillion per day in financial transactions. Ciena noted that the reliable, high-speed transmission of huge amounts of data over undersea cables is increasingly important in fields including healthcare and academic research.

For the research program, Amir Khandani, a professor of electrical and computer engineering at Waterloo, is leading a team of post-doctoral fellows and graduate students that are developing algorithms designed to efficiently and rapidly correct errors, including lost or dropped bits of data, that occur during extremely high-speed, long-distance optical transmission.

When incorporated on the electronic chips that are built into equipment for receiving and transmitting data, the algorithms developed by the Waterloo team can free up cable capacity, while also enabling the faster correction of errors in line with other technological advances in optical communications.

Under the three-year partnership, announced at an event at the University of Waterloo, Mr. Khandani holds the position of Ciena/NSERC Industrial Research Chair on Network Information Theory of Optical Channels. Ciena noted that the relationship between Waterloo Engineering and Ciena has already produced seven U.S. patents, with additional patents pending.

http://www.ciena.com/about/newsroom/press-releases/

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Cavium and China Unicom trial 5G user cases on M-CORD

Cavium, a provider of semiconductor products for enterprise, data centre, wired and wireless networking, and China Unicom announced a targeted program for the testing of 5G use cases on a M-CORD SDN/NFV platform leveraging Cavium's silicon-based white box hardware in M-CORD racks populated with ThunderX ARM-based data centre COTS servers and XPliant programmable SDN Ethernet-based white box switches.

Under the program, China Unicom and Cavium plan to shortly commence trials in a number of locations across mainland China to explore the potential of the new service.

Cavium and China Unicom are specifically demonstrating multi-access edge computing (MEC) use cases developed through a previously announced collaboration based on the ON.Lab M-CORD (Mobile Central Office Re-architected as a data centre) SDN/NFV platform at the Mobile World Congress (MWC) Shanghai.

The demonstration involves a M-CORD SDN/NFV software platform and hardware rack integrated with virtualised and disaggregated mobile infrastructure elements from the edge of the RAN to distributed mobile core and the ONOS and XOS SDN and orchestration software.

The companies stated that this architecture is designed to enable turnkey operation in any central office or edge data centre for a full NFV C-RAN deployment. The solution is based on a Cavium-powered rack that combines the ThunderX ARM based data centre servers with the programmable XPliant Ethernet leaf and spine SDN switches to provide a full platform for M-CORD.

Regarding the latest project, Raj Singh, VP and GM of the network and communication group at Cavium, said, "Cavium is collaborating with China Unicom to explore 5G target use cases leveraging the M-CORD SDN/NFV platform and working towards field deployment… a homogenous hardware architecture optimised for NFV and 5G is a pre-requisite for field deployments".

http://cavium.com/Cavium-and-China-Unicom-Announce-Trials-of-M-CORD-NFV-5G-Platforms-in-China.html

• Earlier this year, Radisys and China Unicom announced they had partnered to build and integrate M-CORD development PODs featuring open source software. For the project Radisys, acting as systems integrator, used the CORD open reference implementation to enable cloud agility and improved economics in China Unicom's network. The companies also planned to develop deployment scenarios for the solution in the China Unicom network.
• The resulting platform was intended to support future 5G services by enabling mobile edge services, virtualised RAN and virtualised EPC. The companies also planned to develop an open reference implementations of a virtualised RAN and next-generation mobile core architecture.

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TIM launches 1G FTTH and previews 4.5G

Italy's TIM has claimed another first for its mobile network by enabling upload speeds of up to 75 Mbit/s for all customers, and from July this year will enable 700 Mbit/s download speeds, over its 4.5G network in Turin, Milan, Rome, Naples, Palermo, Taormina and Giardini-Naxos.

In addition, as part of its fixed and mobile ultrabroadband initiative, TIM is launching a new 1,000 Mbit/s fixed-line service in 70 Italian municipalities. The company stated that the initiatives are the result of key investments to upgrade its ultrabroadband network, which currently reaches approximately 67% of Italian homes with fibre and covers 97% of the population via its 4G mobile network.

Through its Fibre and Mobile program, TIM offers customers connectivity enabling up to 1,000 Mbit/s download and 100 Mbit/s upload rates in 70 municipalities where the FTTH service is already available and, leveraging its 4.5G mobile network, 700 Mbit/s download rates in 11 cities. TIM stated that new customers can now sign up for its new Fibre and Mobile offer and receive broadband service with from 100 up to 1,000 Mbit/s bandwidth.

TIM stated that through planned investments for the period 2017 to 19 amounting to around Euro 11 billion, of which Euro 5 billion is dedicated to network modernisation, it has extended fibre coverage in Italy to over 16 million homes in around 1,900 municipalities. In 1,300 of these municipalities the broadband speed has been doubled to 200/70 Mbit/s via its FTTH infrastructure.

In addition, on its mobile network, having become the first service provider in Europe to launch 4.5G commercial service with download speeds of up to 500 Mbit/s in 11 cities, from July this year TIM plans to offer up to 700 Mbit/s download speeds in Turin, Milan, Naples, Rome and Palermo, Taormina and Giardini-Naxos for customers with compatible devices.

TIM is also offering all customers mobile service with upload speeds of up to 75 Mbit/s on Samsung Galaxy S8 and S8+ and Sony XPERIA XZ Premium devices.

http://www.telecomitalia.com/tit/en/archivio/media/note-stampa/market/2017/NS-TIM-1000-Mega.html

• In April, TIM announced that as part of a program to implement 5G technology it would launch the first field tests in the city of Turin, and would demonstrate the technology in the city on 5G Day at its Open Lab innovation and development centre.
• The Torino 5G project, instituted by TIM through an agreement with the Turin municipal authority, is designed to allow TIM to carry out early trials of 5G technology in a metro environment by the end of 2018. The company noted at that time that Turin was expected to become the first city in Italy to have a 5G mobile network, and cited a goal of deploying the technology by 2020.
• For the 5G Day, TIM partnered with Qualcomm Technologies and Ericsson to demonstrate speeds of up to 700 Mbit/s download and up to 75 Mbit/s upload over its live 4.5G mobile network.

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Silicon Labs launches XOs for 100/400G line cards

Silicon Labs, a supplier of silicon, software and solutions for networking applications, has introduced a new family of crystal oscillators (XOs), the Si54x Ultra Series, that is claimed to offer the lowest jitter frequency-flexible solution on the market.

The new Si54x Ultra Series XOs deliver jitter performance down to 80 femtoseconds (fs) for both integer and fractional frequencies across the entire operating range. The devices provide leading frequency flexibility and jitter margin performance and target demanding applications including 100/200/400 Gbit/s line cards and optical modules, hyperscale data centres, broadband, wireless infrastructure, broadcast video, industrial and test and measurement systems.

Silicon Labs' Si54x Ultra Series XOs are available with single, dual and quad frequency options and offered in an industry-standard 3.2 x 5 mm package, providing drop-in compatibility with traditional XO devices, as well as fast lead times and high reliability.

Silicon Labs noted that its PLL-based approach to oscillators is designed to enable efficient manufacturing and simplified factory programming to reduce lead times compared with custom oscillator products. Silicon Labs claims that this approach allows it to ship samples of any frequency XO within 1 to 2 weeks, and to deliver production quantities wthin four weeks.

The company's new Si54x oscillators employ Silicon Labs' advanced fourth-generation DSPLL technology to provide an ultra-low-jitter clock source at any output frequency. The device can be factory-programmed to any frequency from 200 kHz up to 1.5 GHz with <1 ppb resolution. In addition, on-chip power supply regulation allows noise rejection and enables consistent, reliable low-jitter operation in noisy scenarios such as high-speed networking and data centres.

The Si54x XOs also offer a drop-in replacements for low-jitter surface acoustic wave (SAW)-based oscillators while delivering superior frequency tolerance and temperature stability. The devices provide support for common output formats including LVDS, LVPECL, HCSL, CML, CMOS and Dual CMOS. Samples and production quantities of the Si54x Ultra Series oscillators are available immediately, and Silicon Labs offers a range of free web-based tools to support design and customisation.

http://news.silabs.com/press-releases

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Spirent supports testing of New H3C 100 GBE switch

Spirent Communications, a supplier of network test and measurement solutions, announced that it supported New H3C in conducting what is believed to be the highest density 100 Gbit/s data centre switch test.

Spirent also announced it had partnered with the China Mobile Research Institute (CMRI) to demonstrate automated testing of virtual core networks.

100 Gbit/s switch testing

The test, completed by Spirent and the New H3C Group and moderated by independent test lab Network Test, demonstrated the line-rate forwarding capacity and hyper-scale IP route announcement capacity of the H3C S12500X-AF chassis loaded with 100 Gbit/s ports and achieving a density of 768 x 100G ports per chassis. The S12500X-AF switch can support 48 x 100 Gbit/s QSFP28 pluggable optical modules per slot.

The test involved Spirent TestCenter and the N11U chassis, representing Spirent's flagship network performance test solution, equipped with the high density dX3 12-port 100 Gbit/s test modules designed to verify next-generation data centre architectures and routers.

For the testing, Spirent TestCenter generated 100 Gbit/s line-rate transaction traffic of various frame lengths and provided packet loss, latency, jitter, frame sequence, code errors and FCS error analytics to reflect the quality of transmission in real time.

The Spirent dX3 quint-speed test module can support twelve 100 or 40 Gbit/s ports per slot, 25 x 50 Gbit/s ports, or 48 x 25/10 Gbit/s ports per slot. It also supports key interface features such as FEC, auto-negotiation and Link Training. The module can be used to verify data plane QoS for hyper-dense network devices at line-rate, and for testing complex routing, data centre and access protocols on switches and routers.

Virtual core network testing

Separately Spirent announced a collaboration with the China Mobile Research Institute (CMRI) to demonstrate automated testing of virtual core networks at Mobile World Congress (MWC) Shanghai. Spirent noted that the demonstration is part of a joint effort to develop a methodology for automated testing of the functionality and performance of the China Mobile TIC (Telecom Infrastructure Cloud).

The partners plans to incorporate the test methodology into an automated testing system developed by CMRI to speed testing of services in operational virtual core networks and to form part of the complete vEPC environment developed by CMRI.

At MWC, Spirent has provided the test engines for the demonstration, including the virtualised mobile core network emulation and performance testing tool, Landslide Virtual, and the automated testing platform, iTest. The solutions automate performance and functionality tests used to develop, spin-up and monitor the vEPC. In addition, devops models have been developed for the test methodologies, allowing tests to be automated and incorporated into the virtualised network.

https://www.spirent.com/Newsroom/Press_Releases

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AT&T and China Telecom sign partnership deal

AT&T and China Telecom announced they have signed a framework agreement that strengthens their cooperation to support the development of advanced network services for multinational companies operating in China.

Through the agreement, the companies will help multinational customers leverage secure global communications to support business growth in China and worldwide. AT&T and China Telecom will also jointly work to create new services in the areas of Internet of Things (IoT), cloud-based big data, Voice over LTE (VoLTE) roaming, and software-defined networks (SDN).

The companies noted that the new agreement renews the 20-year authorisation under which Shanghai Symphony Telecommunications (SST), the joint venture formed bAT&T, China Telecom and Shanghai Information Investments, was established in 2000. As part of the new agreement, the parties intend to expand the scope of SST and the locations it serves to enable the delivery of new business services and technologies to customers.

Specifically, under the renewed agreement the companies plan to:

1.         Help establish industry standards for SDN and support their adoption.

2.         Launch bilateral roaming tests, as contemplated in a previously executed roaming agreement for business customers.

3.         Explore the potential of VoLTE roaming.

http://about.att.com/story/att_and_china_telecom_expand_business_solutions_for_multinational_companies.html

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IoT forecasts come into focus

For years now there has been forecast after forecast predicting the size of the IoT market by the end of the decade or ten years hence. There is always a big number of connected things and impressive valuation for the sum of the whole market, and with the large mobile operators such as AT&T and Verizon now including connected things in their quarterly reports there is hard data to back up the rosy forecasts. At an editorial briefing in San Jose last month, Qualcomm executives said it is now shipping one million wireless connections per day - this certainly gives a perspective on how fast IoT can grow. The company has hundreds of OEM design wins for its MDM9206 LTE modem for IoT.

As of June 15th, the GSMA Intelligence services says there are 8,132,111,132 mobile connections, including M2M. The GSMA's online tracker further reports 5,016,263,289 unique mobile subscribers, which are assumed to mean people with at least one mobile phone and SIM card. By subtraction, this means 3.1 billion M2M connections tracked by the GSMA via their mobile operator members.

This piece collects newly published data from several sources. First, IDC recently reported that worldwide spending on the IoT will reach nearly $1.4 trillion in 2021. Second, the Cisco Visual Network Index (VNI) found that M2M connections globally will grow from 780 million in 2016 to 3.3 billion by 2021, a 34% CAGR or fourfold growth. Third, the newly published Ericsson Mobility Study finds that 70% of wide-areas IoT devices will use cellular technology in 2022. While studies from different authors will never precisely line up, this collection of data agrees that real and significant revenue from IoT for carriers has started to materialize and will grow quickly in the near term.

Highlights from IDC’s Worldwide Semi-annual IoT spending guide

The first big finding to notice in IDC's report is that worldwide spending on IoT will reach $800 billion this year, up 16.7% year over year, which means that the market this month must be worth tens of millions of dollars. These numbers are spread out amongst the hardware, software, services and connectivity that enable the IoT. This means splitting the pot between vendors such as Qualcomm, Sierra Wireless, Cisco Jasper, integration specialists, and of course carriers such as AT&T, Orange and Vodafone. There are many others that could be included on this list, especially when considering the global market.  In that sense, the $800 billion is just a starting point. IDC's forecast says that by 2021, global IoT spending will total nearly $1.4 trillion. In a press release announcing the study, IDC's Carrie MacGillivray, vice president, Internet of Things and Mobility, stated that the true value of IoT is realised when the software and services come together to enable the capture, interpretation, and action on data produced by IoT endpoints.

IDC breaks down 2017 investments in IoT as follows: manufacturing operations ($105 billion), freight monitoring ($50 billion), and production asset management ($45 billion), smart grid technologies for electricity, gas and water and smart building technologies ($56 billion and $40 billion, respectively). Looking to 2021, IDC expects these use cases will remain the largest areas of IoT spending. Smart home technologies are forecast to experience strong growth (19.8% CAGR) over the five-year forecast. The use cases that will see the fastest spending growth are airport facilities automation (33.4% CAGR), electric vehicle charging (21.1% CAGR), and in-store contextual marketing (20.2% CAGR).

IDC sees hardware as the largest IoT spending category to 2021, the last year of the forecast, when it is overtaken by the services category. This is to be expected as the various physical sensors and connectivity units must be deployed first before a service can be offered. IDC says hardware spending will be dominated by modules and sensors that connect end points to networks, while software spending will be similarly dominated by applications software. In addition, IDC says services spending will be about evenly split between ongoing and content services and IT and installation services. The fastest growing areas of technology spending are in the software category, where horizontal software and analytics software will have five-year CAGRs of 29.0% and 20.5%, respectively. Security hardware and software will also see increased investment, growing at 15.1% and 16.6% CAGRs, respectively.

Regional highlights:

•   Asia Pacific (excluding Japan, APeJ) will be the IoT investment leader throughout the forecast with spending expected to reach $455 billion in 2021.

•   The U.S. will be the second largest region with IoT spending reaching $421 billion in 2021.

•   Western Europe will reach $274 billion in 2021.

The IDC Worldwide Semiannual Internet of Things Spending Guide is quite comprehensive, covering IoT spending for 12 technologies and 54 use cases across 20 vertical industries in eight regions and 52 countries (for more details see here: http://www.idc.com/getdoc.jsp?containerId=prUS42799917).

Cisco looks wide with its VNI forecast

Generally speaking, Cisco's forecasts have tended to be the most optimistic. This year’s Cisco VNI indicates that its IoT coverage includes both M2M and emerging category of wearable IoT devices. M2M connections, which Cisco defines as home and office security and automation, smart metering and utilities, maintenance, building automation, automotive, healthcare and consumer electronics, are predicted to grow from 780 million in 2016 to 3.3 billion by 2021, a 34% CAGR or fourfold growth.

Wearable devices, which Cisco notes could connect and communicate to the network either directly through embedded cellular connectivity or through another device (primarily a smartphone) using WiFi, Bluetooth, or another technology, include such things as smart watches, smart glasses, heads-up displays (HUDs), health and fitness trackers, health monitors, wearable scanners and navigation devices and smart clothing. The Cisco VNI predicts that by 2021 there will be 929 million wearable devices globally, growing nearly threefold from 325 million in 2016 at a CAGR of 23%. By 2021, Cisco expects that 7% will have embedded cellular connectivity, up from 3% in 2016. As AR/VR headsets enter the market, they could start to have a tangible impact on mobile traffic.

Ericsson looks to short-range and wide-range IoT connectivity

The newly published Ericsson Mobility Report finds that at the end of 2016 there were around 0.4 billion IoT devices with cellular connections. Ericsson's study divides IoT into short-range and wide-area segments, and it provides some guidance as to how IoT is impacting the network. For instance, the report says use cases with VoLTE calls for IoT (Cat-M1) are starting to emerge. This could extend mobile voice service to IoT devices, an interesting possibility.

By 2021, Ericsson expects there will be 2.1 billion devices connected via LTE-M and NB-IoT networks, roughly a 30% CAGR from today. This trend has already started. This year, several prominent mobile operators have rolled out commercial LTE-M networks. For instance, in March, Verizon announced the commercial launch of its nationwide 4G LTE Category M1 (or Cat M1) network. The coverage spans 2.4 million square miles. Verizon will introduce low rate, multi-year plans to match the longer useful life of Cat M1 devices, including data plans that start at $2 per month per device, with customised options available for bulk activations and volume purchases. In May, AT&T followed suit by announcing the deployment of its nationwide LTE-M network ahead of schedule.

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