Digital Video is the Biggest Variable

Use of online video games, movie down-loads, video conferencing, web-based television programs, video clips on social networking sites, and video-clip uploads and downloads (such as YouTube) are becoming increasingly widespread among Internet users.  Digital video files in general represent an increasing percentage of backbone and access network transmission.  And the requirements are changing rapidly as more consumers acquire high-definition (HD) TV sets and new video storage and on-premises networking products.


HDTV and IPTV Are Just Emerging

The phenomena of HDTV and IPTV are relatively new to consumers.  Neither has been available long enough (or at prices low enough) to have penetrated more than a few percent of the world’s 1.2 billion TV households.  The leading markets, the US and Japan, had HDTV penetration in the range of 20% to 30% of households last year, according to estimates from electronics marketing firms.  This suggests that these two countries had more than 75% of the world’s HDTV households in 2006, with worldwide estimates ranging from 25 to 50 million households.  The forecasts have worldwide penetration approach levels near 10% of TV households in 2011. About one-third of the world’s TV households presently subscribe to some type of CATV service.  The published estimates for the number of IPTV subscribers worldwide in 2006 are about 5 million – less than 1% of TV households and about 2% of CATV households.  Forecasts for the number of IPTV subscribers in four or five years fall in a range of 70 to 150 million – again approaching levels near 10% of TV households. 

Digital TV Provides a Moving Target

The currently low penetration figures for IPTV and HDTV do not mean that these technologies have failed in the market.  Rather, they mean that the growth is yet to come, and the bandwidth requirements for digital video may encounter a strong surge as more households adopt these technologies in three to five years.  Transmission speeds needed to support HDTV depend on the compression technology.  With MPEG-2 compression, an HDTV signal will require 15 Mbps to 20 Mbps.  As of early 2007, MPEG-4 was not generally available, but estimates for streaming HDTV over digital channels ranged from 5 Mbps to 10 Mbps – about five times more than standard-definition TV.


Multiple HDTV Channels

The data on HDTV penetration into TV households suggests that there is potential demand for more than one simultaneous HDTV signal.  Some households already have acquired a second HDTV set, and this percentage is expected to increase.  There is also the possibility of subscribers seeking to watch one HDTV program while receiving and recording another, either in HD or SD.  Thus, the bandwidth for simultaneous SDTV and HDTV channels is added together to determine the requirement per home in all digital networks.


Upstream Speed Also Important

In the table, Internet speeds are reported as the downstream bit rate.  Upstream has a lower bit rate in many carriers' offerings.  High users require higher-speed Internet for video editing, video conferencing, large-file downloads, high-end gaming, etc.  The 10 Mbps proposed for high user requirements may be conservative.  High-end offerings from some carriers extend to 30 Mbps or 50 Mbps.  Operators in Japan and Korea offer 100 Mbps services, and higher speeds are said to be under development.  In summary, the near-term bandwidth requirement for all-digital triple-play might range from 16 Mbps to 48 Mbps per household.  Some triple-play systems use less because they are not transmitting all the video applications in the digital bit stream.  Verizon, for example, currently is using a second downstream wavelength channel to transport broadcast video services.