Mobile carriers will have to be creative with affordable mobile plans and services to keep up with the increasing demand, says Gartner analyst Jessica Ekholm.
The growth of mobile data use around the world is soaring, with an expected 59 percent rise in 4G LTE data use in 2015 alone, according to new figures from research firm Gartner. And by 2018, mobile video will drive more than 60 percent of that data traffic, the estimates show.
What that means, says Gartner analyst Jessica Ekholm, is that mobile service providers around the world, including Verizon, AT&T, Sprint and T-Mobile in the United States, will have to continue to focus on well-priced mobile plans for consumers that include adequate data packages and increasing capabilities to deal with the torrent of data use to come.
"The amount of time consumers spend on the Internet, whether via mobile phone, tablet or PC, will continue to increase," Ekholm wrote in her Feb. 5 report, "What's Driving Mobile Growth
Communications service providers (CSPs) "will need to focus on creating new pricing with a focus on data access, such as shared plans" that offer more data at affordable prices, while refining their services "with a focus on creating richer, more immersive and more personalized experiences, to increase their customer numbers," wrote Ekholm.
Mobile app developers will also have to do their part to support the soaring rise of data use, she wrote. "As the mobile app market matures, app developers will have to sharpen their focus on the marketing and transparency of their apps, in order to retain customers," she said. "Gartner's research indicates that although affluent people and traditional early adopters are the leading users of new technologies and devices, younger, less wealthy people make greater use of mobile apps. Young people's greater acceptance of apps and mobile content will require app developers to adjust their techniques to address the differences between user groups."
So what's fueling the rise in mobile data use?
Part of it is the availability of newer and faster networks, a rise in the number of users of these networks, and more affordable 3G and 4G handsets that help to increase data traffic, wrote Ekholm.
The biggest driver of the global data use surge, however, is mobile apps, particularly mobile video apps, according to Ekholm. "Although network speed and reliability are priorities for many mobile customers, it is really apps and content that are driving traffic volumes as people increasingly chat to friends and family, watch videos on the move, and listen to streamed music," she wrote.
Data collected by Gartner from various mobile providers suggests that mobile video is generating 50 percent of all mobile data, she wrote. "We expect video streaming to account for over 60 percent of mobile data traffic in 2018, as consumers increase the number of videos they watch and upload. Fast, uninterrupted, video experiences encourage people to increase their video usage."
Data usage is increasing also due to increases in users of video-calling services, according to Ekholm. "In terms of traffic, five minutes of 3G FaceTime video calling uses up to 15MB of data—a small amount. However, as there are many users, the collective total amount can be large. In addition, mobile music streaming can easily generate hundreds of megabytes of data, but this varies greatly between mobile music apps—for example, a user actively listening to music on Spotify may consume more than twice as much data as a user of Pandora."
One barrier to increased 4G data usage is its extra cost, compared to 3G services, she wrote. "Although 4G service prices are likely to fall to 3G levels to make them more affordable, 3G networks will continue to fuel worldwide data growth during the next five years," said Ekholm. "We predict that, in 2018, half of North American mobile connections will use 4G networks, but in the Middle East and Africa 4G users will amount to only 3.5 percent of the region's total. We expect 3G connections to grow by 45.7 percent globally in 2015. This double-digit growth shows the longevity and importance of 3G networks."
As more affordable 4G handsets and services are adopted around the globe, data growth will continue, she said. "The increase in affordable 4G-enabled handsets and 4G services, which are becoming priced on par with 3G services, will collectively boost traffic. We predict that, by 2018, 4G users will generate 46 percent of all mobile data traffic. This is because, by 2018, each 4G smartphone will use nearly 5.5GB of data per month, which is three times more than a 3G smartphone."
Ekholm's report also estimates that worldwide mobile data traffic will grow by 55 percent a year in each of the next five years, and that by 2018, a 4G smartphone user will use 3.7 times more data a month than a 3G smartphone user. By 2018, 17 percent of all connections worldwide will be 4G connections, but they will generate 46 percent of all data traffic, according to Gartner's estimates.
"The future will be tough for CSPs and mobile app developers that decide not to upgrade the user experiences they deliver on their services and products," the report concludes. "The winners will be those providers best able to satisfy consumers' demand for high data use, while maintaining their margins."