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Summary:

I have been saying for some time that the launch of the 3G iPhone was going to jump-start the demand for wireless broadband. The subsequent release of additional web-friendly mobile phones (we like to call them superphones ) — the Samsung Instinct, the BlackBerry Bold, the […]

I have been saying for some time that the launch of the 3G iPhone was going to jump-start the demand for wireless broadband. The subsequent release of additional web-friendly mobile phones (we like to call them superphones ) — the Samsung Instinct, the BlackBerry Bold, the Google Phone, and Sony Ericsson’s Xperia X-1 — that use 3G wireless networks has now shifted that demand into high gear.

According to data collected by Chetan Sharma Consulting, the U.S. wireless data market grew 7.3 percent in the third quarter to hit $8.8 billion in data services revenue. Despite the recession, many in the industry are of the opinion that wireless data sales aren’t going to fall, and in fact will stay strong for the foreseeable future. A report from London-based research firm Analysys Mason predicts that “mobile network operators in developed regions should prepare for a tenfold increase in wireless network traffic by 2015.” Here are some interesting findings from their report:

  • By 2015, developed regions will account for about 25 percent of the cellular user population but those users will generate 65 percent of total global wireless network traffic.
  • Average wireless network traffic per cellular user (for all voice and data services) in developed regions will increase to eight times its 2008 level by 2015, rising from 56MB per month to 455MB per month.
  • By 2015, data will account for 94 percent of total wireless network traffic in developed regions.

Such a data explosion, however, means that mobile network operators will have to spend a lot of money to upgrade their networks in order to keep up with the demand. As Dr. Alastair Brydon, the Analysys Mason report’s co-author, notes, “In the short-term, underutilisation of 3G networks allows mobile operators to offer low-cost USB services, but operators may be forced to rethink their strategies when they are confronted by the need to make further network investment.” Indeed, we have already seen how Verizon, Sprint and others are imposing data transfer limits on their “unlimited data offerings.”

  1. Om,

    Superphones have less to do with the explosive growth in mobile data traffic. The principal driver thus far has been the USB-dongle and modem phenomenon accompanied by subsidized or free laptops and netbooks. While these have been the domain of the business user, mobile operators are going after the residential customer base with their very reasonably-priced offerings.

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  2. @Ram

    These superphones are a new phenomenon and will be the main reason why you will see the growth in wireless data consumption increase. I think USB dongles etc got the initial demand right but on a larger scale, superphones are the driver.

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  3. [...] technology sector that isn’t expected to be hurt by a struggling economy is wireless data. GigaOM points to new data that predicts the average wireless network traffic per user (voice and data [...]

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  4. And WiFi will play a big role. As you can see the iPhone does not let you buy movies, TV series or even music over 3G. 3G carriers don´t have a valid business model that allows customers with flat rate contracts to download visual content. AT&T just bought Wayport and Fon continues to make deals with mobile players who want to offload heavy data traffic through WiFi. We work with SFR Neuf already but we have other large mobile players who we are teaming up with.

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  5. [...] The iPhone and the Ensuing Wireless Broadband Boom – GigaOM Leave a comment Comment RSS Previous: Hacking Away at iPhone 2.2 TV-Out Secrets | The [...]

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  6. You write that “operators will have to spend a lot of money to upgrade their networks in order to keep up with the demand” – but looking at the figures more closely it is evident that they will never be able to spend the money fast enough to catch up with Mobile Data demand. Another problem is – they can’t just put more and more base stations wherever they want; there are regulation and zoning restrictions and other hurdles. And besides – where are they going to get all that money? They can’t just charge they subscribers more to cover these costs.
    The bottom line is that Wi-Fi will become a critical component in the puzzle.
    The operators will have to cooperate with router-based solutions like FON, and intelligent Wi-Fi management software on the devices, like WeFi.com

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  7. [...] With a conference call scheduled for early Monday morning, some business details that have been waiting for the merger’s completion (like when the Chicago and D.C. networks will be live) should finally be made public. While you will be able to read that news here soon after we learn it, today we’re setting out our own agenda for the new Clearwire and some things we think it needs to get done in the first 100 days to keep its market lead over the eventual competition in the rapidly expanding mobile-data market. [...]

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  8. [...] The iPhone and the Ensuing Wireless Broadband Boom – GigaOM [...]

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  9. [...] the release of the 3G iPhone maean a wireless broadband boom? GigaOM [...]

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  10. @Om & Ram

    There’s a difference between the US market and much of Europe & elsewhere. In the US, there still isn’t the impetus behind massmarket consumer 3G USB dongles for PCs seen elsewhere. This is largely down to pricing – most US 3G contracts are $50+ per month, and there’s not many prepaid options. Elsewhere, $10-15 per month gets 1-3GB capped services, which coupled with cheap (usually Huawei) modems gets millions of users online. The US market for 3G modems and PC mobile broadband is still enterprise/enthusiast focused.

    In much of Europe, over 90% of 3G data traffic is driven by PCs. In the US, the 3G traffic much more geared into iPhones, BlackBerries and other high-end smartphones.

    I don’t see this changing too much over the next year.

    Dean

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