Network traffic
The volume of traffic carried by wireless networks has grown dramatically since the advent of wireless broadband services, delivered by smartphones and dongles. We continually track the changing nature of mobile network traffic and this page provides a collection of free articles containing our analysis.
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LTE news roundup for April 2012
There have been a number of interesting announcements in the last few weeks related to LTE.
Firstly, NTT DoCoMo in Japan has announced that the number of subscribers to its LTE Xi service reached two million on March 18 2012 – an increase of one million subscribers since December 24 2011. This growth has been encouraged by the introduction of the first Xi-compatible smartphones in November 2011. NTT DoCoMo launched its LTE service on December 24 2010. It is particularly interesting to see the recent increased pace in subscriber growth. It has taken NTT DoCoMo less than three months to reach its two-millionth customer, compared with about a year for its one-millionth customer. This progress looks very promising.
Following my recent positive review of the LTE-capable iPad 3, I’m pleased to see that iPad 3 sales have got off to a great start. Apple has announced that 3 million iPad 3 units were sold in the first three days after its launch on March 16 2012. However, it has not been all plain sailing for the LTE-equipped iPad. The iPad 3 does not support all frequency bands associated with LTE across the world, restricting its use to North America. The iPad 3 only supports LTE using 700MHz and 2100MHz frequency bands. Apple’s website now states, “4G LTE is supported only on AT&T and Verizon networks in the U.S. and on Bell, Rogers, and Telus networks in Canada”. In Australia, Apple has been forced to offer refunds to customers who had mistakingly purchased the iPad 3 believing that it would work with Telstra’s LTE network.
The rapid take-up of the iPad 3 will help to drive traffic volumes on LTE networks in the USA. As a sign that US operators are anticipating significant growth in mobile traffic, it has been widely reported that Verizon (in an FCC filing) has predicted a more than 20-fold increase in LTE data traffic from the end of 2011 to the end of 2015.
I’ve written before about how some operators are trying to encourage the substitution of fixed broadband services using LTE. For example, Vodafone Germany has been seeking to migrate its DSL customers to LTE. Up until recently, US operators have preferred to position LTE services as a complement to fixed broadband services. In March 2012, Verizon made the notable step of unveilling its new HomeFusion antenna product, which is more clearly aimed at customers wanting to displace fixed broadband services. The HomeFusion antenna, which is priced at USD200, has to be installed on the outside of a customer’s home (by Verizon). Verizon hopes to offer HomeFusion in all of its LTE markets by the end of 2012. The performance of its LTE network, with downlink speeds of 5-12Mbps and uplink speeds of 2-5Mbps, will be attractive to rural customers currently experiencing patchy DSL services. Verizon charges USD60, USD90 and USD120 for its HomeFusion services with monthly data allowances of 10GB, 20GB and 30GB respectively. While these are generally more expensive (and have lower monthly allowances) than many fixed broadband services, they are likely to appeal to customers unable to get decent fixed network speeds.
About the author:
Mark Heath is co-founder of telecom strategy and telecommunication consultancy company Unwired Insight. He provides regular in-depth analysis on LTE and 4G, and has co-authored over 40 research reports on the biggest issues in the telecom industry.
Three UK highlights pent-up demand for mobile data
Contrary to the view from some analysts, recent results from Three UK show that there is little prospect of halting the tide of mobile data.
Since the heady days of early all-you-can-eat mobile data tariffs, in the last couple of years we have reported on a trend of UK mobile network operators limiting mobile data usage by increasing prices, introducing restrictive data caps and applying high charges for out-of-bundle usage. The motivation for this was to protect the limited capacity of their networks, as they realised the potential for mobile data services to consume this voraciously.
However, with a smaller number of customers than its competitors, a relatively large spectrum allocation and the early deployment of advanced 3G technology such as HSPA and HSPA+, Three UK has been able to buck the trend. Over the past year, it has re-introduced all-you-can-eat data plans for both contract and pay-as-you-go smartphone users:
- in December 2010 it introduced all-you-can-eat data to The One Plan contract, offering large bundles of voice minutes, text and all-you-can-eat data, at prices from GBP25 per month
- in March 2011 it introduced its All In One pay-as-you-go bundles, priced at GBP15 (with 300 voice minutes, 3000 texts and all-you-can-eat data) and GBP25 (with 500 voice minutes, 3000 texts and all-you-can-eat data) for a 30-day period
- in October 2011 it enabled all new and existing contract smartphone users to benefit from all-you-can-eat data for an additional cost of GBP3 per month on their contracts.
Three highlights the importance of giving “peace of mind” and “eliminating data fear”, to encourage its customers to make the most of the data capabilities of their smartphones. It clearly recognises the attraction of unlimited use of smartphone services and apps, and it is exploiting its advantage in data capacity to make the most of this. In September 2011, Three reported that The One Plan was its most popular contract tariff and its all-you-can-eat data bundle was its most popular pay as you go option.
The consequences of this approach are apparent in the mobile data usage figures for the New Year period at the end of 2011/start of 2012. This week Three UK reported that its smartphone users consumed a combined total of 154 terrabytes of data on New Year’s Eve and New Year’s Day, compared with just 28 terrabytes the year before – an increase of 450%. It expects smartphones to become even more significant over the coming months, with ownership approaching 100% of its customer base during 2012.
Three’s experience demonstrates the pent-up demand that exists for mobile data, and this will become ever stronger as the benefits of smartphones and their apps become apparent to users and developers. It will be increasingly difficult for operators in a market to resist this demand if they have competitors like Three offering all-you-can-eat data. While it may not be palatable for their investors, substantial investment in new technologies such as LTE and LTE Advanced will be the only option to satisfy demand and remain competitive.
Mobile TV: rise of the BBC’s iPlayer on 3G networks
The BBC’s iPlayer has driven substantial traffic growth in fixed Internet networks in the UK. However, its impact has been artificially constrained on mobile networks by the restriction that iPlayer could only be viewed on mobile devices via a WiFi connection. This week, an update to the BBC’s iPlayer application on Apple iPhones and iPads finally allows iPlayer content to stream across 3G networks.
In the last few years, there has been a great deal of hype about mobile TV. At the peak of this hype, mobile TV was being seen by many in the wireless industry as the killer application for mobile phones. Sadly, many within the industry had the wrong idea – believing that mobile users would simply demand live versions of terrestrial TV channels, and a great deal of attention was directed to mobile TV broadcasting technologies, such as DVB-H, which offered the potential of transmitting a relatively large number of live TV channels to mobile devices.
Very few people seemed to realise that the whole nature of TV viewing was changing, and that the needs of mobile users were very different from people relaxing in front of their living-room TVs at home. The adoption of personal video recorders (on satellite, cable and terrestrial TV platforms) has empowered many TV viewers, by separating TV consumption from the TV schedules. At last, people can watch their favourite programmes whenever they want to, rather than having to watch them at the time they are transmitted.
Alongside the adoption of PVRs, we have also seen the rapid adoption of online TV services such as the BBC’s iPlayer. The BBC iPlayer went live (in its non-beta form) in December 2007 – four years ago. For the first time, people could view (and listen to) any programme from the complete range of the BBC’s TV and radio programmes that had been transmitted in the previous seven days.
iPlayer quickly had a substantial impact on fixed Internet networks and ISPs. By June 2008 (only six months after launch), iPlayer accounted for about 5% of all UK Internet traffic, and achieved about five million page views per day. Many ISPs complained that iPlayer was placing too much strain on their networks and that the BBC should contribute to the cost of providing increased capacity. By the end of its first year, 180 million programmes had been viewed.
By September 2011, the number of monthly requests for TV and radio programmes reached 153 million, with an average of 1.7 million iPlayer users per day. On average, each user of TV on iPlayer now streams over an hour of TV content per week. Each user of radio streams over two hours of radio content per week.
iPlayer has now seen considerable expansion beyond PC-based delivery, and versions of iPlayer have been made available on a raft of different devices and platforms, including:
- Virgin Media’s cable video-on-demand service
- Freesat digital satellite set-top boxes
- Freeview digital terrestrial set-top boxes
- Wii, Playstation 3 and Xbox 360 games consoles
- the Apple iPhone and iPad
- Android mobile devices
- a range of other mobile devices, from Nokia, BlackBerry, Samsung and Sony Ericsson.
Despite the availability of iPlayer on a number of mobile devices, its use has been artificially constrained by only allowing content to be streamed via a WiFi connection. So, mobile users have not been able to access iPlayer content via 3G networks. We have long reported that mobile TV and radio services are extremely network intensive, and represent the most challenging services to support for mobile network operators.
While the avoidance of iPlayer traffic on 3G networks has provided respite for mobile network operators concerned about the limited capacities of their networks, such service restriction has also limited the perceived value of mobile Internet services. Increasingly, users expect the services they use on fixed Internet platforms to be freely available on mobile platforms, so it was only a matter of time before iPlayer arrived on 3G networks.
Now that UK mobile network operators have substantially reduced data allowances, they may feel that higher pricing and low data limits are sufficient safeguards to prevent high usage, allowing them to support a less constrained service mix.
In the absence of LTE networks in the UK until 2013 or 2014 (due to much-reported delays to spectrum auctions), it remains to be seen if 3G operators can strike the right balance between controlling network usage and providing a compelling mobile Internet proposition to users. I suspect that many users will be surprised by the speed at which their monthly usage allocation is gobbled up by iPlayer. Furthermore, many may be disappointed by the quality and reliability of the iPlayer service via today’s 3G networks. Extensive deployment of LTE cannot come quickly enough, although Ofcom does not anticipate wide availability of LTE coverage until 2015.
I believe that the launch of iPlayer on 3G networks will profoundly shape the future of mobile networks in the UK, even more than iPlayer has shaped the future of fixed Internet networks. More than any other service, end user expectations for iPlayer usage, performance and reliability will truly set the bar by which users judge their operators. For mobile network operators and mobile users, there’s no going back!
About the author:
Mark Heath, of telecom consultancy company Unwired Insight, provides in-depth telecom analysis of global mobile markets. Mark has authored more than 40 reports on key issues in the wireless telecommunications industry.
