Sunday, September 16, 2012

Smart Phone Data Consumption is an Issue, Not a Crisis

At a global level, Analysys Mason predicts that mobile data will grow at a 41 percent compound annual growth rate. That would be quite a slower rate than had been the case in 2011, for example, when growth was about 90 percent, on average, in the U.S. market. 

According to a 2011 Nielsen monthly analysis of cellphone bills for 65,000 lines, smart phone owners, especially those with iPhones and Android devices, were consuming about 435 megabytes in the first quarter of 2011, up from about 230 Mbytes in the first quarter of 2010. 

Data usage for the top 10 percent of smartphone users was up 109 percent, as you would expect. The top one percent of users increased their usage by 155 percent from 1.8 GBytes in the first quarter of 2010 to over 4.6 GBytes in the first quarter of 2011, Nielsen said. 
Still, though growth is occurring across the board, at the 80th percentile and below, users consumed 500 Mbytes or less each month. In the 60th percentile, users consumed 250 Mbytes or less each month.
The point is that bandwidth consumption on mobile networks remains a key issue, but maybe is not a crisis. It is no simple matter to cope with 40 percent annual bandwidth consumption increases. 

The good news is that most users don't really consume all that much data, and users already are learning to offload most of their consumption, especially the bandwidth-intensive video viewing operations, to home Wi-Fi networks. 

One would assume that trend could become even more important in the future. The other issue is the matter of sheer spectrum availability, though. Many observers say there are many ways to make more intensive use of existing spectrum, so that new allotments are unnecessary.

"Squatting" is the main problem with spectrum, not a looming shortage, say a pair of analysts at Citigroup. 

“Too much spectrum is controlled by companies that are not planning on rolling out services or face business and financial challenges,” wrote Jason Bazinet and Michael Rollins. “We do not believe the U.S. faces a spectrum shortage.”

Of course, by that assertion, they mean that spectrum now being used by 2G and 3G networks that would be more efficient if converted to 4G networks. 

Also, much of the fallow currently licensed spectrum the analysts cite is held by Clearwire, which is having trouble getting customers for the spectrum it has activated, and which is still building its network. The so-called unused spectrum is unused for reason: customers cannot be found, yet. 
The Federal Communications Commission is using the specter of a looming shortage to push through the re-designation of 120 MHz of broadcast spectrum for wireless broadband, the analysts. Even so, existing spectrum remains undeveloped, Bazinet and Rollins said. 

“Today, U.S. carriers have 538 MHz of spectrum, and an additional 300 MHz of additional spectrum waiting in the wings. But only 192 MHz is in use today,” they said.

A majority of that spectrum is devoted to legacy service not likely to deliver more than 1 Mbps during usage peaks, compared to 5 Mbps for 4G, the latest data network technology, they argue.

Bazinet and Rollins said if the full 538 MHz was converted to  4G, it could support 5 Mbps at 10 percent simultaneous usage.

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