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May 13, 2013

Mobile Bandwidth Forecasts Now Reflect Changing User Behavior

Most forecasts of mobile data consumption over the last couple of years until 2012 were consistent in the prediction that bandwidth demand would grow between 25 times to 26 times over roughly a five-year period.

However, the latest estimate by Cisco suggests growth of something like 13 times over the next five years. The revisions are not unusual. It frequently has been the case that linear extrapolations have suggested bandwidth growth more robust than eventually developed.

One might assume that is typical of any growth rate, for any product, as adoption matures. One might also assume there are changes in both supplier and end user behavior, though, that change the demand curve over time.

Suppliers learn to promote offload of mobile data to the fixed networks, and users learn how to do that on a consistent basis.

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.

There could be multiple reasons for the slowdown. Some will suggest the growing number of lighter users, who tend to be a feature of late adopters, has something to do with the trend. PwC analysts, for example, 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.

The other big theory is that users have switched 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).

Cisco notes that the 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.

So it might be quite logical to suggest that two primary changes have taken place. New smart phone users are lighter users, and most users have learned to shift much consumption to Wi-Fi networks.




Edited by Rachel Ramsey


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