In case you were wondering what all of those smartphones and tablets have been up to recently, the trade association for the U.S. cellular industry, CTIA is out with its semi-annual survey, and in a word when it comes to consumers we certainly do not have a failure to communicate.
The numbers, to say the least, are impressive. They also point to the fact that all of the predictions that we are in the midst of a data explosion, particularly in regards to using our personal devices, are absolutely correct. They may even have been a bit of an underestimation.
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The full report results can be found at the following link, but below are the key findings:
- One trillion MB of data were used from July 2011-June 2012
- Prepaid subscribers represented 74.9 million out of the almost 322 million wireless subscriber connections
- Average monthly bill, that includes voice, data and text usage, was $47.16
- Smartphone adoption continues to grow, as of June 2012, smartphones made up 131 million (or 41 percent) of the almost 322 million wireless subscriber connections.
- The number of tablets increased to 22 million, which is almost 17 percent of all wireless connections.
- There was an almost 10 percent increase in prepaid subscribers, from 68.4 to 74.9 million or 23.3 percent of U.S. wireless subscribers, from the previous year.
- Even though many consumers are using more voice, data and text than ever before, the average monthly bill went down $0.07 to $47.16 per month.
- CTIA concluded that, “These figures illustrate Americans’ growing appetite for more mobile data and the wireless industry’s need for more spectrum to meet their demands.”
What was most interesting was the year-over-year comparisons of the 12-month survey results from July 2011-June 2012 compared to the previous July 2010-June 2011:
- Wireless network data traffic: 1.16 trillion megabytes; June 2011: 568 billion megabytes (104 percent increase).
- Minutes of Use (MOU): 2.321 trillion; June 2011: 2.251 trillion (three percent increase).
- SMS sent and received: 2.273 trillion; June 2011: 2.206 trillion (three percent increase).
- MMS sent and received: 58.3 billion; June 2011: 52.7 billion (10.6 percent increase).
- Average local monthly wireless bill (includes voice, data and text): $47.16; June 2011: $47.23 (0.2 percent decrease).
Service provider investing on the rise
CTIA points out that thanks to the Federal Communications Commission’s (FCC) 2009 shot clock ruling on tower siting, the number of cell sites continues to grow:
- There were 28,641 cell sites added this year for a total of 285,561 nationwide.
- SPs invested more than $25 million in capital expenditures in the last 12 months to do everything from add more towers to upgrade their networks from 3G to 4G.
- Since 2002, SPs have invested more than $230 billion in capital expenditures, a figure which doesn’t include the billions spent to acquire spectrum from the U.S. government.
The need for more spectrum
Not surprisingly, especially since the data release came at CTIA’s annual MobileCON event, the venue was used as a platform for a plea for more spectrum.
“As our survey proves, today’s wireless industry offers consumers not only the world’s best products and services, but also the best value. Americans are using more voice, data and text than ever before, but are paying less for their wireless usage than even a year ago. Thanks to the fiercely competitive wireless industry, consumers have a variety of choices from which provider to contract or prepaid plans to devices,” said Steve Largent, president and CEO of CTIA. “With the persistent increase in usage, this survey is another proof point for why our members need more spectrum to meet consumer demands. We appreciate the FCC’s NPRM on the incentive auction of broadcast television spectrum and hope that its brought to market quickly so that our members may continue to innovate and invest in our nation’s economy.”
This obviously is a major take-away from the findings, but there is also another one which bears some scrutiny. The average monthly bill is going down, while usage is going up. The latter highlights the call for more spectrum and also the need for deploying such things as small cells and Wi-Fi offload solutions. The former, made all the more interesting by the need to actually acquire spectrum, shows why service providers are looking to get rid of unlimited data plans and move toward usage-based pricing models.
It is difficult to imagine how even having service providers challenge OTTS for location-based services and other new services that can generate revenue can build fast enough to keep up with the data explosion without getting those monthly bills to start heading north. The only way to do that is through usage-based pricing so cost-causers can be cost bearers and SPs can remain profitable.
The sizzle in the survey may be in the traffic growth numbers, but the real tale of the tape is in following the money. With more and more people looking to have all of their devices on one data plan, and with video destined to be a huge component of traffic, be it streamed or real-time conferencing, as a snap shot of where we are, and the challenges ahead from a financial perspective, this survey speaks volumes. There is a whole lot of data going on, and the industry needs to find ways to better monetize it and do so sooner rather than later.