While many within the mobile industry are preoccupied with the evolution of ARPU, the future level of wireless network traffic has received relatively little attention and yet this will have a profound impact on the businesses of mobile network operators and their network equipment vendors. Total wireless network traffic volumes from cellular users in developed regions will increase ten-fold by 2015, with data traffic rapidly overtaking voice. If traffic-intensive services, such as broadband Internet access with USB (HSPA) modems, are heavily promoted and aggressively priced, total wireless network traffic volume may accelerate even more dramatically, increasing to as much as 30 times its 2008 level by 2015.
Historically, wireless network traffic has been dominated by voice telephony, because popular data services, such as SMS, generate a tiny amount of traffic. However, the increasing take-up of smartphones, such as the Apple iPhone, and USB (HSPA) modems will bring about substantial increases in wireless network traffic volumes. Already, traffic-intensive applications, such as Internet radio, are available for the iPhone as downloads from Apple’s App Store, and mobile network operators (MNOs) are offering low-cost broadband services using USB modems. For example, 3 UK offers its existing customers a mobile broadband service, which offers a substantial monthly data allowance of 5GB, for only GBP7.50 (about USD13) per month.
The total volume of wireless network traffic (from both voice and data services) generated by cellular users in developed regions will be almost ten times greater in 2015 than in 2008, as shown in Figure 1. This rise will be driven by: increased take-up of USB modems and smartphones; widespread deployment of advanced 3G technologies and femtocells; affordable pricing (particularly for traffic-intensive services); more indoor usage of cellular devices; and the increasing size of items of Web content. The average monthly volume of wireless network traffic per customer in 2015 will be eight times that in 2008, increasing from 56MB per month to 455MB per month.
While fixed–mobile substitution for voice calls will continue to occur, causing voice traffic volumes to increase, data traffic will rise at a significantly faster pace, and will eventually dominate the traffic mix. By 2015, data services will account for 94% of total wireless traffic volumes in developed regions, as shown in Figure 2.
A number of factors could result in traffic levels differing significantly from our base-case forecast, particularly with regard to the evolution of data pricing. If traffic-intensive services, such as USB (HSPA) modems, are heavily promoted and aggressively priced, total wireless network traffic volumes may accelerate even more dramatically, increasing to almost 30 times the 2008 level by 2015. Consequently, MNOs need to consider their data pricing strategies and the extent to which they wish to compete with fixed broadband services. Although the underutilisation of 3G networks has allowed MNOs to boost ARPU with low-cost USB modem services in the short-term, substantial further investment would be required in the networks if operators continued to promote such low-cost traffic-intensive data services.
The report Wireless Network Traffic 2008–2015: forecasts and analysis provides detailed forecasts of wireless network traffic, broken down by terminal and service type, for each major region of the world (Western Europe, North America, developed Asia, Central and Eastern Europe, Central and South America, developing Asia and the rest of the world).
Figure 1: Downlink traffic from cellular handsets worldwide, by region, 2008–2015 [Source: Analysys Mason, 2008]
Figure 2: Service proportions of downlink wireless network traffic in developed regions [Source: Analysys Mason, 2008]
