Mobile Data Usage – Trends and Operator Implications
Apr 05, 2016
The Surge in Mobile Data
Frost & Sullivan’s research into the US mobile data services market indicates that the mobile data traffic in the US is increasing at double-digit rates annually. This is hardly surprising, given the ubiquity of 4G networks, popularity of smartphones with larger screens, and availability of content-rich services for mobile phones. Some noteworthy trends related to mobile data usage in the US include:
- An average 4G LTE smartphone consumes upwards of 2.5 GB of cellular data every month
- Connected tablets are being used more and generating approximately 2.0 GB of cellular data on 4G networks
- Connected laptops and air cards (yes these still exist!) consume more than 5 GB of cellular data every month
Every category of connected device has seen an increase in data usage in the past 12 months and this growth isn’t expected to slow down anytime soon. In fact, most categories of devices are expected to see a CAGR of 15 percent or more in average monthly cellular data consumption by the year 2020.
Exhibit shows the average smartphone monthly cellular data consumption in the US from 2014 to 2020.
What are the Key Drivers of this Growth?
The key drivers for the growth of mobile data traffic include:
- Advanced networks – LTE is clearly driving mobile data usage. LTE devices consume more data than 3G devices of the same type. Growth in 4G adoption continues to drive data and video consumption in the US.
- Larger screen devices - The average screen size continues to evolve with many phones now between 4.7 to 5.5 inches. This plays into the way data is consumed.
- Increased time spent on mobile activities – this is perhaps as a result of the superior end user experience delivered by the faster networks and advanced devices. An average consumer currently spends nearly three hours every day on non-voice activities on his or her smartphone.
- Video streaming, and peer to peer communication service –Peer to peer video calling services continue to grow and are likely to increase in share of mobile data consumption in the next couple of years. Video streaming content services have been, and likely will remain, the main driver of mobile video data traffic as well.
- 5G services on the horizon – As proven with 4G LTE, faster networks lead to higher cellular mobile data consumption. Therefore, 5G devices will consume more data than 4G devices of the same type.
Wireless spectrum is a limited resource, which means that there is an upper limit on the amount of data traffic that can be supported on cellular networks. Some strategies adopted by the US mobile operators to manage the service quality for mobile broadband include:
- Maintain appropriate spectrum holdings to ensure that peak traffic demands are met satisfactorily
- Invest in spectrally efficient technologies such as LTE and 5G
- Re-farm / re-use 2G spectrum to deliver mobile broadband services
- Use network-based customer experience management solutions (such as traffic optimization solutions)
- Use appropriate pricing strategies to support the desired consumer usage behavior
The Road Ahead
The advent of low powered WAN networks can help offload machine to machine data traffic. For other types of connected devices, the cellular networks will have to be optimized to handle the growth of mobile data traffic. There is an upper limit on how much consumers are willing to pay for mobile services (on a per device basis) which is an important attribute that should be considered when pricing mobile data services.
Fourteen years of product marketing, research, and consulting expertise, which includes supporting clients’ needs through more than 140 syndicated market research deliverables and consulting assignments. Particular expertise in Assessing next-generation telecommunications trends, technologies and market dynamics; Helping clients develop and execute their go-to-market strategies; Providing continuous inputs to clients into new market developments and helping them understand the strategic implications.