Think the Internet is big now?  You ain’t seen nothing yet.

A recent report from Cisco Systems Inc. has some astounding predictions, including one that global Internet traffic will rise 4-fold from 2010 to 2015, a compound annual growth rate of 32%.  In four years, internet traffic will be the equivalent of 204,100,000 people streaming Internet HD video simultaneously, all day, every day.   The report expects that there will be 15 billion network-connected devices in the world, twice the world’s population.  Those estimates, however, may prove to be conservative since  much of the growth is taking place  in fast-growing emerging economies such as  China and India.  America’s compound annual growth rate in Internet traffic of 26% pales in comparison to the countries on the 24/7 Wall St. list.  There are more than 230 million in the U.S.  That number is only expected to increase 2% by 2015.   Many commentators such as Strategy Analytics have lamented the poor performance of the U.S. compared with other countries in terms of broadband adoption and download speeds.  ” The United States, despite claiming a vibrant and growing broadband market, still falls shy of the top twenty in the 2010 survey,” the research firm says in its Global Broadband Scorecard: 2010Broadband Composite Index (BCI) Rankings.  “In fact, the US dropped three slots in our penetration rankings compared to our last update.”

• Read The Ten Countries Where Internet Use Will Explode

Interestingly, one area that won’t experience significant growth is peer-to-peer (P2P) file sharing services such as BitTorrent.   Consumer VOIP (voice over IP demand) is expected to see a CAGR of 4%. Traffic from wireless devices will exceed traffic from wired devices by 2015, according to Cisco.

“P2P traffic, still the largest share of Internet traffic today, will decrease as a percentage of overall Internet traffic,” according to the report. “Internet video streaming and downloads are beginning to take a larger share of bandwidth, and together with Internet video calling will grow to over 60 percent of all consumer Internet traffic in 2015.”

The biggest opportunity for Internet growth, though, may lie in the Middle East and Africa, which Cisco expects will increase by 52%.  Business IP traffic in the Middle East and Africa will grow at a compound annual growth rate  of 30%,  faster than the global average of 24%.   Africa’s population, which is about 1 million now, is expected to double by 2050, according to the United Nations.  Experts are expecting broadband demand will rise at a CAGR  of more than 20% for the next few years.    The population in the Middle East doubled between 1976 and 2005, creating one of the reasons for the current unrest in the region.  The region’s population is forecast to rise 54% to 437 million by 2050 from 2010.

China already had  more than 457 million Internet users at the end of 2010, more than the combined populations of the United States, Canada and Mexico.  Growth there will continue to explode, however, thanks to the growth of mobile devices.  China Unicom,  China’s second-largest carrier, recently announced that it was developing its own mobile operating system.  The People’s Daily Recently reported that the company will “help push forward the digitization in southwestern Sichuan Province” over the next few years, which was the location of a devastating earthquake a few years ago.  Since the disaster, China Unicom has invested $308 million in Sichuan.

Internet and wireless growth in India, the second most populous nation, has exploded over the past few years.   In the most recent quarter, the number of wireless customers increased 9.38% over the previous quarter to 687.7 million, according to regulator Trai.  To its credit,  Trai recognizes that penetration rates are low and is encouraging the government to adopt policies to encourage greater broadband use.    Even so, there may be  500 million broadband users by 2012, bigger than the U.S. population, which is about 307 million.

Other counties on the 24/7 Wall St. list are seeing surging demand for wireless spectrum.  The Australian government has come under criticism for its spectrum management policy.  As the Sydney Morning Herald noted, many Australians “own multiple SIM cards for phones, broadband … and iPad tablets.”   That is also the case in Latin America.  Mexican billionaire Carlos Slim said earlier this year that he was planning to invest  $1.5 billion over the next two years in Argentina’s telecommunications sector.   MVS Communications and Clearwire Corp. recently announced plans to develop a $1 billion 4G network in Mexico.   Brazil is attracting attention from foreign investors, including Google Inc. (NASDAQ: GOOG), because of surging Internet use there.   The government in Brasilia recently announced plans to invest as much as $633 million  into internet services each year until 2014.

These are The Ten Countries Where Internet Use Will Explode.

10. Italy
> Internet Use Growth 2010-2015: 5.4x (10th fastest)
> Mobile Traffic Growth 2010-2015: 28.3x (8th slowest)
> Broadband Speed Growth: 3.5x (13th)
> Broadband Cost ($/Mbps): fastest $9.62 (30th least expensive)
> Household Broadband Penetration 2010: 55% (27th greatest)

Italy’s economy may be, in the words of the The Economist, “tottering,” and its political system a mess because of the scandals around Prime Minister Silvio Berlusconi, but that has not slowed Internet use growth, which is growing at the world’s 10th fastest rate.   Service isn’t that cheap either, ranking the 30th least expensive.  Strategy Analytics  says the country has a 55% broadband penetration rate. which shows there is plenty of room for growth.

9. New Zealand
> Internet Use Growth 2010-2015: 5.4x (9th fastest)
> Mobile Traffic Growth 2010-2015: 49.9x (7th fastest)
> Broadband Speed Growth: 6x (the fastest)
> Broadband Cost ($/Mbps): $9.82 (29th least expensive)
> Household Broadband Penetration 2010: 59% (26th greatest)

New Zealand is taking an aggressive approach to improving broadband service in the country where penetration rates are a measly 59%, according to Strategy Analytics.  As a result, experts say it will have the 9th fastest growth in Internet use through 2015.   “The government’s objective will be supported by government investment of up to $1.5 billion alongside private sector investment, and be directed to open-access infrastructure,” according to a government website.

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8. Australia
> Internet Use Growth 2010-2015: 5.7x (8th fastest)
> Mobile Traffic Growth 2010-2015: 32.4x (9th slowest)
> Broadband Speed Growth: 5.5x (3rd fastest)
> Broadband Cost ($/Mbps): $17.69 (12th most expensive)
> Household Broadband Penetration 2010: 80% (9th greatest)

Australia’s eighth fastest projected growth in Internet use comes with the third fastest growth in broadband speeds.  Moreover, the country’s broadband penetration rates are the 9th greatest at 80%, as Strategy Analytics notes. This underscores the high priority the government there places on broadband services.  Australia’s government is backing major improvements to broadband.

7. China
> Internet Use Growth 2010-2015: 5.9x (7th fastest)
> Mobile Traffic Growth 2010-2015: 62.8x (4th fastest)
> Broadband Speed Growth: 6.0x (2nd fastest)
> Broadband Cost ($/Mbps): $5.00 (12th least expensive)
> Household Broadband Penetration 2010: 27% (44th greatest)

China overtook the U.S. in the total number of broadband lines in 2008. What’s even more remarkable is that its broadband speed growth was the second fastest and its services were the 12th least expensive.  Chinese consumers are just as eager to snap-up the latest gadgets and gizmos as anybody else.  Strategy Analytics estimates that Chinese broadband penetration rate at 27%, underscoring the huge potential for growth in the market.

6. Rest of Latin America
> Internet Use Growth 2010-2015: 6.3x (6th fastest)
> Mobile Traffic Growth 2010-2015: 40.7x (9th fastest)
> Broadband Speed Growth: 2.9x (17th slowest)
> Broadband Cost ($/Mbps): n/a
> Household Broadband Penetration 2010: n/a

Latin America boasts the sixth-largest growth rates as the growing middle classes in the region snap up smartphones and tablets in droves.   Many countries, particularly the poorer ones, are seeing a growth in wireless use which can connect remote regions with one another.  Strong growth in countries such as Argentina should encourage these trends.  Broadband growth rates in Central America are expected to exceed Latin America as whole.

5. South Africa
> Internet Use Growth 2010-2015: 6.6x (5th fastest)
> Mobile Traffic Growth 2010-2015: 87.9x (2nd fastest)
> Broadband Speed Growth: 2.7x (2nd slowest)
> Broadband Cost ($/Mbps): n/a
> Household Broadband Penetration 2010: not in the top 60

South Africa’s rising economic growth has manifested itself through the 5th fastest projected  growth in Internet use in the world. Its mobile traffic use was the second fastest growing in the world.  South Africa’s high unemployment continues to stymie growth. Service has been so bad that a Durban IT company was able to deliver data faster by pigeon than by the country’s largest network.

4. Mexico
> Internet Use Growth 2010-2015: 7x (4th fastest)
> Mobile Traffic Growth 2010-2015: 65.3 (3rd fastest)
> Broadband Speed Growth: 2.8x (3rd slowest)
> Broadband Cost ($/Mbps): $21.96 (7th most expensive)
> Household Broadband Penetration 2010: 31% (41st greatest)

Despite the troubles with its neighbor to the North,  the Mexican economy is expected to grow at a 4.1% rate, which should continue to support strong growth in Internet use, already the fourth fastest growing.    This is noteworthy given that broadband services are the 7th most expensive.  Broadband penetration rates of 31%, per the estimates of Strategy Analytics,  show that web use has much further to expand.

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3. Brazil
> Internet Use Growth 2010-2015: 8.2x (3rd fastest)
> Mobile Traffic Growth 2010-2015: 38.5x (11th fastest)
> Broadband Speed Growth: 2.9x (4th slowest)
> Broadband Cost ($/Mbps): $14.32 (18th most expensive)
> Household Broadband Penetration 2010: 20% (47th greatest)

Brazil, whose economy has been on a tear thanks to the boom in oil prices, has a shockingly poor broadband penetration rate of 20%, ranking 47th in the world.   Broadband service  is the 18th most expensive, but that does not deter Brazilians from going online.  Internet use is the third-fastest growing there in the world.

2. Rest of Middle East and Africa
> Internet Use Growth 2010-2015: 8.3x (2nd fastest)
> Mobile Traffic Growth 2010-2015: 61.1x (5th fastest)
> Broadband Speed Growth: 2.5 (the slowest)
> Broadband Cost ($/Mbps): n/a
> Household Broadband Penetration 2010: n/a

It’s hardly a surprise that Internet growth will have the 2nd fastest increase in this region.  Social media is playing an important role there during the recent turmoil.  Speed growth was the slowest measured by Cisco.  “Africa, on the whole, is still not experiencing the benefits of direct internet access and increased bandwidth as is being enjoyed in South Africa,” says Winston Smith, Managing Director of Alvarion Southern Africa and Nigeria,  in a statement to IT Africa. “This is due to the huge costs involved in bringing fibre optic cables inland to service inland African countries.”

1. India
> Internet Use Growth 2010-2015: 8.8x (the fastest)
> Mobile Traffic Growth 2010-2015: 114.1x (the fastest)
> Broadband Speed Growth: 4.1x (6th fastest)
> Broadband Cost ($/Mbps): $12.32 (23rd most expensive)
> Household Broadband Penetration 2010: not in the top 60

Between now and 2015,  India will be the place to be for any company even remotely connected to the Internet. It leads the list in most metrics including  Internet use growth, mobile traffic grow and networked devices growth.  Broadband growth was a weak spot, not cracking the Cisco ratings.

Jonathan Berr

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