Wandering Data

This piece was written by Ben St. Pierre, a co-op student from the University of Waterloo who spent a very productive term with us in the fall. He wrote this in December, just before taking off for the wintry north of Ontario. Thanks for a great term Ben.

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With the popularity of smart phones on the rise, and the ever increasing consumer hunger for bandwidth, the sustainability of the mobile data network has come into question. Recently, AT&T has come under fire for its lackluster wireless 3G coverage in the two most heavily used wireless data networks, San Francisco Bay and Manhattan [link]. Is this the beginning of the mobile data apocalypse, or will carriers and consumers adapt?

The Current Trend

Earlier this year, Cisco published a white-paper which presents their mobile traffic projections and growth trends [link]. They project that mobile data traffic will double every year, increasing 66 times over from 2008 to 2013 with Latin America having the strongest growth, followed by Asia-Pacific. This growth will mostly be driven by mobile video streaming and carrier-subsidized 3G-equipped laptops and netbooks [link].

This growth may seem wonderful at first, but the network infrastructure is not equipped to handle such a large jump in usage and the projected profits from this usage are expected to grow at a much slower rate [link].

To make matters worse, FCC chairman Julius Genachowski is warning of a “looming spectrum crisis” [link]. Available spectrum is scarce, and reassigning spectrum is a process that takes years to implement.

Mitigating Factors

Although the current projections show unsustainable growth, some factors may help keep mobile data technologies in the hands of the mass-market.

Public Education

AT&T has cited that 3% of their smartphone users are currently consuming 40% of the network capacity [link]. This seems to be due to the lack of education of their users. When contacting these customers, AT&T found that they were using their smartphones by streaming audio around the clock or watching large numbers of streaming videos, both of which consume excessive amounts of data.

The End of Unlimited Data Plans

The easiest way for carriers to educate their users is by giving them a comprehensive data plan. Unlimited plans make it easy for users to abuse the network since they don’t need to be aware of their usage. If users need to be aware of how much data they are using due to usage-based plans, excessive use would likely be less of a problem. Carriers have already hinted that unlimited plans are not sustainable and that in the long term, a switch to usage-based plans is likely [link].

Long Term Evolution (LTE) and 4G

4G wireless technology promises faster speeds and better scalability than the current 3G networks. The FCC has a four-part plan to help ease the deployment of 4G which includes unleashing spectrum and removing obstacles for ubiquitous 4G deployments [link]. However, the projected bandwidth requirements still exceed the capacity of 4G technology [link] and a widespread deployment is still years away from available.

Femtocells

Femtocells are small network appliances (similar to network routers) which use a 3G antenna and a regular broadband internet connection (such as DSL or cable) to connect 3G wireless devices to their mobile carriers. AT&T has already released a limited number of 3G Femtocells as a test program which supports up to 4 wireless phones in a residential setting [link]. Sprint-Nextel also has its own femtocell offering through its AIRAVE product [link].

The next generation femtocells are also already in development. LTE groups have indentified femtocells as a priority item for 4G deployment. This could increase early 4G adoption by consumers who wish to get 4G handhelds in areas where 4G is not yet available and thus help alleviate 3G network congestions.

Wifi

Many consumers already know that a Wifi network is preferable to using 3G. They know this due to the visible speed difference in bandwidth-hungry applications. This has lead to consumers looking for wireless devices which also includes a Wifi interface. In a recent study, it was found that 77 percent of mobile phone users want Wifi on their next handset and 75 percent of users who already have Wifi on their phone use it regularly [link] The same study also projects that 90 percent of smartphones will have Wifi by 2014, up from the current 44 percent.

Conclusion

Because of the enormous expected growth, many opportunities have arisen for businesses to solve and although the traffic projections look apocalyptic in growth, there are many mitigating factors which may lessen the impact. Whether or not these factors will be enough to keep the mobile data networks running smoothly however, has yet to been seen.