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Summary:

There are an awful lot of active iPhones in the market, and according to a new report from Ericsson, those devices are having an outsized impact on the world’s 3G networks. Traffic from the iPhone is nearing 50 percent of all data traversing carriers’ HSPA networks.

iphones

Regardless of which platform is winning today’s smartphone race, the installed base of active iPhones remains huge, and according to a new report from mobile infrastructure maker Ericsson, those iOS devices are having an outsized impact on the world’s 3G networks.

Traffic originating from the iPhone is nearing 50 percent of all data traversing carriers’ HSPA networks. Those numbers could have a chilling effect on emerging LTE operators, which are trying to migrate to 4G but are finding themselves contending with the iPhone’s enormous 3G demands.

For its Traffic and Market Report, Ericsson sampled data from GSM carriers in the Americas, Europe and Asia, discovering that, on average, the iPhone accounts for a little more than 20 percent of their total subscribers but a whopping 45 percent of their total 3G/HSPA traffic. In comparison, Android penetration levels among those same operators are around 15 percent, while those devices account for about 30 percent of their 3G traffic loads.

The differences between Android and iPhone users

Ericsson found that, on average, the iPhone and Android ran neck and neck when it came to average consumption per subscriber: around 350 MB per month. But there was huge variation in those usage levels among different carriers, especially on Android. At the high end of Ericsson’s measurements, Android users consume 1,400 MB per month, compared to 1,200 MB for the iPhone, while on some networks Android phone usage averaged just a mere 50 MB per month. Network monthly averages for the iPhone never drop much lower than 200 MB.

The overall variation can be explained by carriers’ widely differing pricing policies. For instance T-Mobile USA not only offers fairly liberal data buckets in its data tiers but also allows customers to use mobile hotspot capabilities at no extra charge, driving up monthly consumption. Ericsson explained the even bigger variation among Google OS phones, however, by the fact that Android devices run the entire gamut of the market, while Apple targets the mid to high end. So in networks where Android plays second fiddle to the iPhone — which for a long while was the case at AT&T — Android devices often gravitate toward the low end, while Apple devices wind up in the hands of power users.

That helps explain how the iPhone can have such an enormous impact on operators’ 3G networks. IPhones are not only a plurality of all devices on the network but also often wind up in the hands of carriers’ most-aggressive data users.

Ericsson’s data only takes HSPA networks into account. CDMA operators like Sprint and Verizon only recently landed the iPhone, so they have spent the past several years loading up their 3G networks with Android devices. Android also is the only smartphone OS besides Windows Phone supported on an LTE network. Compared to 3G, the LTE phone installed base is miniscule, but it’s growing rapidly.

If Apple doesn’t include LTE in this year’s iPhone, the gap between Android and iOS on 3G traffic levels may only grow bigger. Android power users will start migrating to new LTE networks, while iPhone users will remain on much more inefficient 3G networks.

How moving to LTE impacts you

As I have written before, a 3G-only iPhone scenario could play havoc with the wireless industry, particular in North America. If operators must keep investing in their 3G networks in order to meet mounting iPhone traffic, they won’t be able to focus on their future LTE networks, which will ultimately allow them to deliver a lot more data, a lot more cheaply.

Apple has signaled it’s ready to embrace LTE with the launch of the new iPad, hopefully securing 4G’s place in at least some versions of the new iPhone. LTE may sound like a carrier conceit — promising little to consumers except higher speeds and crappier battery life — but consumers stand to lose out as well if the transition to LTE is delayed. LTE is the first stepping stone to much-higher-capacity LTE-Advanced systems and heterogeneous networks.

By dramatically lowering the cost to deliver data, carriers will start lowering the data prices they offer to the consumers. They won’t do it out of the goodness of their hearts, but that’s where competition comes into play.

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  1. This has been disproven so many times, give up the link bait story’s and do some real work.

    1. Kevin Fitchard K.C Sunday, June 10, 2012

      What has been disproven? If you disagree with the premises or conclusions or want to point to some refuting evidence, I’d love to see it, but you will have to be a little more specific…

  2. The right title would be “Are smartphones overcrowding the world’s 3G networks?

    1. The point of the article is that the author believes that iPhones are holding back the progression to 4G or LTE by being 3G only. He wasn’t doing an Android to iPhone comparison contest. It’s not always “who’s better than whom.”

    2. Hi Oletros,

      You’re right, all smartphones are taxing 3G data networks, but the Ericsson data shows the iPhone is responsible for a disproportionate share.

      1. How does “disproportionate” equate to relevant here? Let’s do the math using simple rhetorical figures: We live in a town who’s population is 5000 people. ATT, Verizon and Sprint have “x” amount of cell towers throughout this very small town, but it’s obvious that these are not enough. Also, there are not enough repeaters to support “x” amount of people (we’re dividing by 3 ) so… they each need to continue building out their infrastructure and such.

        A person is a person, and a smartphone is a smartphone. Which smartphone that happens to be is the most irrelevant piece of information given, and not even part of the equation when trying to figure out why there is network congestion and what needs to be done about it.

  3. Halfway in my billing month, and I’m up 4GB with my Verizon Nexus. Loving Netflix on the road.

  4. I have a feeling even with cheaper network fees for the carriers, our prices for data plans won’t be going down anytime soon. They are loosing too much money with texting and ‘some’ voip going over the top.

    1. Kevin Fitchard Sid Sunday, June 10, 2012

      I think you’re right on that, Sid.

      Operators aren’t going to drop the prices of their data plans if they can help it, but they will start offering bigger buckets of bytes for the some price. It certainly won’t happen immediately, though, but the sooner they move their traffic onto 4G networks the fewer excuses they have for charging their current prices.

      1. The number of devices getting on to wireless networks is bound to dwarf the capacity of spectrum. Please do not portray that LTE is an open pipe for carriers to throw any amount of data. Wireless spectrum in finite, and expensive for carriers to throw away data.

        Supply and demand will remain the same once we are on LTE at least on the US in the next 2 years or so.

      2. Hi Srini,

        I’m not portraying LTE as on open pipe. It’s a more efficient and flexible technology. You’re right spectrum is finite, but LTE will give operators many more options to reuse that finite spectrum: a better bits/hertz ratio, better peak throughputs and eventually small cells, 4×4 MIMO, hetnet and CoMP. The list goes on and on.

        If the point you’re trying to make is that LTE is an incremental improvement, then I agree. But you have to take the first incremental step to get later increments.

      3. Bucket rates need not come down in 4G. Within the same
        bucket comparable with 3G, ‘Actual’ data usage per customer on LTE networks will be higher and therefore ‘realized $ per GB used’ would be lower compared with 3G HSPA. Thus, LTE would automatically turn out to be cheaper for users, in line with its better cost efficiency relative
        to HSPA.

  5. Interesting stats and article. However, that’s why I bought a phone and pay $200 a month. It’s almost as if I should feel sorry for the Cellphone companies.

    If they don’t want us gobbling up all the bandwidth on their networks, then stop sending me a bill each month and allowing me the dubious honor of beig a customer. If they don’t want the iPhone on their Network, then don’t sell it in their stores or lock them off their Network.

    I think they run the companies like Airlines. As long as someone pays for a ticket, they’ll sell you a seat and deal with the overcrowding later.

    Don’t blame the iPhone for holding back an industry. Blame the industry for not having a strategy.

    1. Kevin Fitchard Jason Monday, June 11, 2012

      Hi Jason,

      Believe me I understand your frustration here, and I’m not going to defend the operators here on what I find to be byzantine pricing policies that don’t reflect how people really use data. I just don’t think any of that is going to change until we get to more efficient networks. And if we stick with the same outdated network technologies we’re using today, stasis is exactly what will occur.

  6. Well… The providers have sold their products making a huge profit but don’t want to reinvest into their networks. Instead they want to raise their prices, lower our data usage, throttle bandwidth and charge if the consumer goes over their alotted data plans. Meanwhile, AT&T and other companies are trying to offer 4g that is not as stable, more money and only available in very few areas.

  7. I’m puzzled, if Android supposedly owns the number 1 spot with 50+% of smartphone market share (according to analysts like IDC/gartner) why is Android’s subscriber penetration substantially lower than the iPhone across the carriers?

    1. Kevin Fitchard Tim Monday, June 11, 2012

      Hi Tim, a lot of it has to do with existing install base. Android may have the edge in newer phone sales, but Apple has sold a lot of devices over the years. The other major factor is that Ericsson’s numbers only include HSPA networks. Apple only recently brought the iPhone over to CDMA, which means for a long time Verizon, Sprint and many other global carriers drove their smartphone strategies with Android.

      1. I get what you’re saying about installed base but IDC actually makes a distinction between unit shipments and market share. According to their may 24, 2012 report Android commands a worldwide market share of 59% vs 23% for iOS. Are there that many CDMA users worldwide to make up the difference? Another explanation could be that users in Africa, China, India etc may be buying large numbers of android devices without data plans?

      2. Hey Tim,

        Those IDC numbers are for Q1 2012 shipments, not the overall install base of new and old Android vs. iOS devices running on networks in the world. In 2011, Android’s market share was a lot smaller (though still bigger than Apple’s). Android is a monster today, but that’s still a fairly new phenomenon.

        I do think Ericsson’s data skews towards developed markets, which tend to be iPhone heavy (for instance in the U.S. the two OSes are running neck and neck in current sales). But ultimately those are the markets where smartphone penetration is highest and 3G data demand is the greatest.

  8. Those horrible iPhone users… hogging all the networks.

    I’m glad none of the 900,000 new Android users are at fault.

    That’s 900,000 new users *PER DAY*, everyday…. day after day.

  9. Kostas Papahatzis Tuesday, June 12, 2012

    Maybe consumer satisfaction comes into play here and makes Apple the largest consumer in 3G networks. So, mobile browsing is better in iphones than in any other device. As regards to their decision in upgrading iPhones to run under LTE, I guess they will do it. But if they do it too early and the Market fills with iphones offering a bitter broadband experience due to the Network’s growning pains, what will the consumer think? Will they blame the handset or the network carrier, and how much will this affect the overall image of the iphone?

    1. Hi Kostas,

      I think consumer perception is important, but ultimately I think Apple avoids this problem by abandoning its stubborn approach to marketing. It simply can’t call a device with U.S. LTE radios a 4G phone in Italy. There’s so much other great stuff in the new iPhone (and it’s always traditionally played down the connectivity anyway), it will have plenty to market anyway.

      Also, Apple is going to have to split the iPhone into different LTE SKUs. If it will need to make separate North American and European versions of device it could skip LTE in the European version this year.

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