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We are in the midst of a mobile data explosion. According to technology research house Gartner, global mobile data traffic is set to reach 52-million terabytes (TB) in 2015, an increase of 59% from 2014.
And as more and more people get their hands on affordable smartphones and data rates continue to fall, Gartner predicts that number will more than triple in the next three years. By 2018, it says, mobile data levels are estimated to reach 173 million TB.
“Mobile data traffic is soaring worldwide, more than tripling by 2018,” said Jessica Ekholm, research director at Gartner. “New, fast mobile data connections (3G and 4G) will grow more slowly, from 3.8-billion in 2015 to 5.1-billion in 2018, as users switch from slower 2G connections and consume more mobile data.
In the third quarter of 2014, Gartner conducted a mobile app survey and asked 1 000 smartphone users in the US and 1 000 in Germany about their mobile app usage habits. These two countries were chosen because they’re both mature markets but with distinctive operator models.
The survey showed that German users are more restricted by their data plans, and are therefore less likely to watch videos or consume large amounts of data via cellular networks compared to the US.
When asked if they would wait until they get to a Wi-Fi area to download an app or stream content from a video app, 54% of Germans agreed and only 36% of US respondents said yes. Those stats are largely down to the fact that more than 43% of US users felt unconstrained by their data plans, while just 20% of German users felt the same. Thirty-eight per cent of German respondents only get 500MBs with their monthly data plan. On average, Germans stream 10.6 minutes per cellular video session compared with 17.4 minutes for Americans.
Gartner suggests that the survey results indicate that mobile operators should be concentrating on ways to make people feel more comfortable about using mobile data. That may be true, but in emerging markets where people are more likely to be wait for WiFi for activities that use large amounts of data, it shows just how big the opportunity is for free Wi-Fi providers.
The survey also showed that families with children are driving mobile video usage. Users with children were the least concerned about using cellular data to stream video — surprisingly with almost no correlation to income. This is being encouraged by CSPs enabling plans with data sharing available between devices.
Moreover, streaming video over cellular networks isn’t just for children and young adults. In fact the opposite is true — in the US, 47% of the 45 to 54 year olds surveyed stream 15 minutes or more of mobile video apps over cellular networks per session, whereas only 40 per cent of 18 to 24 year olds stream more than 15 minutes.
“The results also showed that YouTube is increasingly being used to stream video for longer periods of time, rather than just for ‘snacking’,” said Ms Ekholm. There is a very small difference between the percentage of smartphone users that use YouTube “less than five minutes” and “30 minutes or more” in the U.S. However, Germans were less inclined to stream videos for a longer period of time (in keeping with the trend of less usage) compared to the US, in line with more restrictive data caps.
“The key to obtaining long-term revenue growth for CSPs is how effectively they can market and sell the value of more expensive high-cap or unlimited data plans to their customers,” said Ms Ekholm. “The evidence is that once customers commit to a larger plan, their usage habits change significantly, resulting in longer-term revenue benefits for CSPs. This shows evidence of pent-up demand and an opportunity for those CSPs able to create the right package.”