Some interesting data from wireless analyst Chetan Sharma today that illustrate the challenges facing mobile operators. Among the highlights: Mobile operators added 2.6 million connected devices and 1.2 million contract customers in Q2; wireless penetration in the U.S. reached 95% and surpassed 100% if one takes out children younger than five.
But the number that got the most attention was average data consumption per user per month. From the quarterly report:
Data traffic continued to increase across all networks. By 1H 2010, the average US consumer was consuming approximately 230 MB/mo up 50% in 6 months. US has become ground zero for mobile broadband consumption and data traffic management evolution. While it lags Japan and Korea in 3G penetration by a distance, due to higher penetration of smartphones and datacards, the consumption is much higher than its Asian counterparts. Given that it is also becoming the largest deployment base for HSPA+ and LTE, most of the cutting edge research in areas of data management and experimentation with policy, regulations, strategy, and business models is taking place in the networks of the US operators and keenly watched by players across the global ecosystem.
Connected Planet’s take,
Kevin Fitchard:
I think a little context is in order here. I’m assuming Sharma is referring to average consumption by users who have mobile data plans. If 95% of the population was consuming 230 MB a month, the industry would be in big trouble right now. Forget slow iPhone downloads — we’re talking complete network gridlock.
That said, 230 MB is a shockingly high number, considering operators were charging by the kilobyte consumed just half a year ago. You’ll also note that 230 MB exceeds the 200 MB cap AT&T is offering for its new low-tier smartphone data plan. Sharma’s numbers are probably skewed by millions of the mobile broadband laptop plans, which generally measure their average usage in gigabytes. But the smartphone is the fastest growing mobile device in the U.S., so while AT&T is still probably right that the majority of its 3G handset users are consuming less than 200 MB a month, it probably won’t stay that way. If average consumption continues to grow at the rate of 50% every six months, AT&T’s tiered data plans will become obsolete shortly after their introduction.
That presents operators with an interesting quandary. Many of them are expected to follow AT&T down the usage-based pricing path, but if they match AT&T’s plans they may find themselves shunting all but their most casual data customers into the highest tier plans — which would effectively be a data cap. If they place their tier caps higher, say at 500 MB or 1 GB, then they might wind up chasing a moving target, as consumers’ expectations as to what constitutes a reasonable amount of mobile data constantly shifts upward.
That’s our take on this. Let us know what you think in the comments section below:
So we have 3 iPhone among us (in the family … I am still on an older basic phone) and our usage is 230M for 2 of them .. the third was 650M > that being because it wasnt set to shift to wifi when that is available at home or office. So again .. this 3/3 being about 230M/mo is very consistent with the Sharma ‘number’. in fact these are NOT high user people … basic email and some facebook and very little browsing and some gps-like maps stuff. Suggestion to ATT and others: when a user gets near the ‘average’ daily rate ‘allowed’ by their plan > a popup window should tell them that they have reached the daily ‘max’ limit as well as a cumulative monthly usage > Maybe give ‘low’ users a discount back at rates that are some % of the rates charged to heavy users.
Kevin Fitchard wrote “Sharma’s numbers are probably skewed by millions of the mobile broadband laptop plans…”
Kevin, do the work, man! “Probably” doesn’t get it. Why didn’t you talk with Sharma directly and find out? All you’ve done is add a layer of conjecture rather than provide some clear analysis.
How would you write the article if you knew that laptop and tablet plans were not being included in the data? So… be a journalist and find out!
I burn 40mb a day commuting one hour streaming Pandora in the car. That’s 800mb a month WITHOUT any e-mail, Facebook..etc. I don’t consider myself a rampant user of data services.