Consumer mobile data use way up, but not panning out for carriers
A Nielsen report showing an 89% rise in data use, but a 46% drop in price per MB could offer proof of operator’s burden.
The average American smartphone user is blowing through approximately 89 percent more data than just a year ago, according to a June report from Nielsen that analyzed the cell phone bills of 65,000-plus consumers.
Driving such growth, said the firm, are smartphones with app-friendly operating systems — Apple's iOS, Google's Android and even Windows Phone 7. While the average Windows Phone 7 owner used 149 MB in the fourth quarter of 2010, by the first quarter of 2011 he was up to 317 MB. Taking a broader view, the average iPhone owner used 313 MB of data during the first quarter of 2010; a year later that average has climbed to 492. Data-hungriest of all, Android users have increased their use from an average of 312 MB a year ago to now 582 MB.
Great news for those manning the bytes? Not really.
"Even as data usage has almost doubled, most users are paying around what they did a year ago for data," Don Kellogg, Nielsen's senior manager of Telecom Research & Insights, wrote in a June 17 blog post. "That translates to a lower cost per unit of data consumed. The amount the average smartphone user pays per unit of data has dropped by nearly 50 percent in the last year, from 14 cents per megabyte (MB) to a mere 8 cents.
"Unlimited," a fine word, speaks directly to the American consciousness, assuaging our fears of containment — and overage fees (CP: The singular solution to bill shock: Think like the customer thinks) — while stoking our delight in openness, potential, gross abundance, even. Unlimited plans have been a customer favorite, which actually worked in the carriers' favor, Nielsen reported a year earlier, following similar analysis, as the majority of wireless subscribers — a stunning 99 percent — were actually paying for much more data than they would ever use.
"The vast majority of customers ... are better off with a pricing scheme like AT&T’s new [tiered] data pricing model than under flat-rate pricing," wrote Roger Entner, vice president of Nielsen's Research and Insights Telecom Practice.
The nation's largest carriers have since moved to tiered pricing, but the speed at which data consumption is currently growing, writes Kellogg, is having "huge implications" for wireless carriers.
Added to the average user's increase, data use among the top 10 percent of users — those in the 90th to 99th percentiles for data use — is up 109 percent, while the very worst offenders — those in the 99th percentile — are using 155 percent more data than a year ago.
Data Usage – and the AT&T-T-Mobile deal
One such implication is of course the pressure to expand and fortify networks, and the study could work in the favor of at least one operator, AT&T, as it argues (with the "burden of proof" on its shoulders, per the Federal Communications Commission) that its proposed $39 billion purchase of T-Mobile is in the best interests of consumers.
In written testimony presented to the Senate Subcommittee on Antitrust, Competition Policy and Consumer rights, AT&T CEO Randall Stephenson submitted that data volumes supported on the iPhone-clogged network have risen by 8,000 percent over the last four years. And with tablets and mobile HD video growing more popular, the challenge for carriers will only heighten.
In 2015, by mid-February, Stephenson estimated, the AT&T network will carry the same amount of traffic that it did for the whole of 2010.
"To meet the ever increasing demand by consumers," Stephenson argued, "we have to find ways to get more capacity from existing spectrum," which is what AT&T believes its purchase of T-Mobile will accomplish.
Its competitors, for now, will presumably have to figure out the same problem for themselves.
Want to use this article? Click here for options!
© 2013 Penton Media Inc.
In this Webinar you will learn how to create a real-time relationship with your customers, how to proactively improve the customer experience, and how to successfully target and cross-sell services to boost incremental revenue.
- Megabytes to Megabucks, Bandwidth to Business Models: How 4G Is Changing Everything
- How to Unplug Your Redundant Telco Apps To Save Money and Improve Efficiency
- When IaaS Isn't Enough: Service Provider Business Models to Drive Growth and Build Margin
- How to Transform Your Aging Telco Voice Network to Drive New Profits and Revenue
- Creative Licensing Approaches for Telcos & Their Network Equipment Vendors
- Smart Home Opportunity: Balancing Customer Data & Privacy
This paper discusses the rise of Diameter and benefits of Diameter Protocol.
- Conducting The Orchestration – Order Management at the Speed of Business
- Toward a Converged Network Edge
- Beyond Spam – Email Security in the Age of Blended Threats
- 6 Important Steps to Evaluating a Web Filtering Solution
- The Expertise to Protect You from Botnet and DDoS Attacks
- Seeing is Believing – Bridging the Order Visibility Gap
Service providers are under tremendous pressure to turn up new services faster then before and, at the same time,
to do it at less expense - and intra-office fiber is one of the biggest challenges in terms of both cost and service
From the Blog
Join the Discussion
Get more out of Connected Planet by visiting our related resources below:
Connected Planet highlights the next generation of service providers, as well as how their customers use services in new ways.Subscribe Now