The rapid take-up of plug and play USB modems and smartphones, such as the iPhone, is an increasing concern for the wireless industry. While the services enabled by these devices will make a valuable contribution to ARPU, there is a risk that traffic volumes will grow beyond the capacities of today’s cellular networks.
Wireless network traffic from cellular users will be driven by six major factors, as shown in Figure 1.
Figure 1: Major factors driving wireless network traffic generated by cellular users [Source: Analysys Mason, 2008]
In order to understand how wireless traffic volumes will change, Analysys Mason has developed a global model of wireless network traffic. Based on extensive current and historical data, assumptions have been made for the evolution of the following variables:
- cellular device types, broken down into three types (cellular broadband USB modems, smartphones and basic cellular phones
- customer usage of a range of services (on a per-service basis), ranging from voice and SMS to video streaming
- traffic intensity of individual services, estimating the number of megabytes consumed by each activity, such as browsing a Web page or receiving an email with an attachment.
Total wireless network traffic generated by cellular users from all voice and data services will increase substantially in developed regions. The model reveals that the total traffic volume in 2015 will be nearly ten times that in 2008, as illustrated in Figure 2. Monthly wireless network traffic per cellular user in developed regions will be eight times greater in 2015 than in 2008, rising from 56MB per month to 455MB per month.
Figure 2: Worldwide downlink traffic from cellular handsets, by region, 2008–2015 [Source: Analysys Mason, 2008]
While developed regions will account for just 25% of the cellular user population by 2015, they will generate 65% of total global wireless network traffic. Increasing cellular penetration in developing regions will also drive up wireless network traffic, but there will be a much greater proportion of basic mobile phones, used primarily for voice communication, than in developed regions. Consequently, total wireless network traffic from cellular users in developing regions will be six times greater in 2015 than in 2008.
While fixed–mobile substitution for voice calls will continue to occur, data traffic will increase at a significantly faster pace, ultimately to dominate the traffic mix. Mobile network operators will have some tough decisions to make. If they continue to offer low-priced mobile broadband services, they may need to bring forward costly capacity-enhancing upgrades, including HSPA+ and LTE, which is not something they want to hear during a global recession.
