How Big a Problem is Growing Mobile Data Demand?

Replacing declining legacy revenues with new sources is a key strategic challenge for service providers. So a key practical issue is whether new broadband access, video entertainment or managed services will grow fast enough to match voice revenue diminution.

In fact, Rupert Wood, Analysys Mason principal analyst, warns “there were already signs two years ago that the shifting balance between smart phone and mobile broadband would result in lower growth of mobile data traffic.” 

In other words, the problem is not "exploding growth," but not enough growth. 

Wood predicts mobile data revenue growth in Western Europe, for mobile service providers, will drop in 2012, for example. And though it might have seemed an improbable development, Wi-Fi has become a virtual default network for most smart phone and tablet traffic.

That doesn’t mean untethered mobile devices are best served by Wi-Fi when users are on the go, but the most data-intensive traffic will tend to get consumed indoors, because that’s the natural place to consume it, not because it is the only place with good enough connectivity, says Analysys Mason.

the problem is that demand will not grow enough.