Mobile Bandwidth Growth Drops 60%, Wi-Fi Likely the Reason

Overall traffic growth for 14 large North American mobile service providers has slowed significantly from the rapid rate of increase seen in recent years, with operators reporting

as much as a 60 percent reduction in their rate of traffic growth.

Where traffic grew in triple digits in 2011, growth was in double digits in 2012, a PwC survey has found.

Many will speculate about the reasons for the slowdown. Some will suggest the growing number of lighter users, as more and more people start using smart phones. PwC analysts speculate that market maturation and late adopters who do not use as much data as early adopters could explain some of the slowing rate of data consumption.

Some of us think users simply are switching much of their device data consumption to Wi-Fi. In fact, Cisco estimates that, in 2016, as much as 70 percent of mobile data consumption will use Wi-Fi.

By 2017, almost 21 exabytes of mobile data traffic will be offloaded to the fixed network by means of Wi-Fi devices and femtocells each month, Cisco estimates. 4G Americas says Wi-Fi offload of mobile traffic is at 35 percent today in the United States and is estimated to be 68 percent by 2016.

Without Wi-Fi and femtocell offload, total mobile data traffic would grow at a compound annual growth rate of 74 percent between 2012 and 2017 (16-fold growth), instead of the projected 66 percent CAGR (13-fold growth), 4G Americas says.

Cisco notes that tthe global average for daily data consumption over Wi-Fi is four times that of cellular, averaging 55 MBytes per day for Wi-Fi, and 13 MBytes for cellular.

 Average Daily Wi-Fi and Mobile Data Consumption

Even as mobile device data consumption grows, consumers rationally respond to incentives, such as the ability to shift consumption to Wi-Fi in ways that protects their data caps. Ignoring such changes in consumer behavior has been an issue before.

In March 2011, for example, AT&T projected that data bandwidth growth would be on the order of eight to 10 times over then-current levels between the end of 2010 and the end of 2015.

That forecast appears to be based on an expectation that volumes would roughly double in 2011 and then increase by a further 65 percent in 2012.

Instead, AT&T seems to be seeing something like 40 percent annual growth. To be sure, 40 percent annual growth is significant. It means bandwidth consumption doubles about every two to three years.

Cisco estimates mobile broadband grew about 70 percent in 2012, and will grow at a compound annual growth rate of 66 percent from 2012 to 2017.

Some believe Wi-Fi offload will slow the rate of mobile broadband growth. On the other hand, even such offloading, at high rates of perhaps 80 percent, would slow the rate of growth by about 50 percent.