Mobile data is the foundation for the massive growth in mobile marketing and advertising these days, and as such, usage is skyrocketing to enormous levels.
A new study sponsored by Coda Research Consultancy forecasts data traffic via mobile handsets in the US will reach 327PB per month in 2015, rising at a compound annual growth rate (CAGR) of +117%.
Mobile video, as the report suggests, will attribute nearly two-thirds of the mobile data consumed over the next five years, rising at +138% CAGR to reach 224PB per month in 2015. The problem remains, however, that carriers are already finding difficulty coping with strained networks, and growth like this will only make things worse.
As carrier networks now stand, network utilization will reach 100% in 2012 during peak times, especially in densely populated cities such as New York, San Francisco and Boston. Mobile data usage is growing much faster than network upgrades, creating a situation where carriers will have to act fast to withstand the barrage of usage that’s forecasted.
“Flat rate pricing has helped drive mobile internet adoption, but we envision that as smartphone penetration rises and as carriers roll out 4G, carriers will have to move toward tiered pricing,” explained Steve Smith, co-Founder of Coda Research Consultancy. “This will not only help carriers to manage network usage, it will help them to increase profits lost to declining voice revenues and help pay for 4G services.
However, carriers face the significant challenge of selling tiered pricing to a public accustomed to flat rates across media services, and because they want their billing to be as simple as possible. Carriers have found predicting data usage very difficult, and are now paying for being so far behind. “Carriers are clearly going to have to do some creative thinking about how to sell tiered pricing to consumers,” continues Smith. “Alternatives to download limits may be around speed and time of day.”
