Here's an irony for you: Mobile data traffic will increase by a factor of 12 by 2014 -- to a mind-numbing 9.7 exabytes, or 9.7 million terabytes -- from what it was in 2008, the iPhone's first big year. But the iPhone won't drive that growth -- in fact, all smartphones, iPads, and the like together will account for just 10 percent of data usage, concludes ABI Research.
That prediction assumes the carriers will continue to aggressively market subsidized 3G netbooks, where customers pay $200 or less to get a netbook or smartbook and commit to a two-year, approximately $40-per-month 3G plan. ABI analyst Jeff Orr expects 2014 to be the year that the majority of netbooks, smartbooks, and laptops will be sold with embedded 3G caopabilities, so the explosive growth in their wireless data traffic will only get worse after 2014. Those systems will require data services for the same kinds of bandwidth-sucking uses as broadband-connected netbooks, laptops, and PCs are today: video, music, gaming, and the like.
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ABI's prediction is scary. If AT&T has had so much trouble ensuring enough bandwidth for the iPhone in its first three years of existence, how can the carriers possibly support the order-of-magnitude larger level of bandwidth that 3G-connected netbooks, smartbooks, and laptops will use? If ABI is correct, in four years, the carriers will need to increase wireless broadband capability by about 10 times what they have now.
The methods by which carriers expand bandwidth vary:
- They can increase the number of cell towers and radios in use to create more local bandwidth, then shuttle it around via traditional or fiber connections. That's the most efficient method, since they can adjust wireless bandwidth and contain that traffic locally. But they need to have enough wired capacity to make that work, and that can involve digging up streets, which is slow and expensive.
- They can increase wireless bandwidth by licensing more spectrum and using that spectrum not only for local traffic but also as a backbone to carry traffic from cell tower to cell tower, instead of running more fiber or copper. But there's only so much spectrum available, and when the FCC chooses to auction it off, it takes years to procure -- realistically, it's a decade-long process.
- They can "shape" traffic by charging high-bandwdith users more, but that raises Net neutrality issues. Not only would heavy users have to pay more (as is true for water and electricity), competitors could be put at a disadvantage by providers that charge more for services such as VoIP, multiuser gaming, and video streaming under the guise of billing for higher usage (in this scenario, the same carrier has no trouble offering similar services without hogging bandwidth).
The carriers will do all three (or the first two if the FCC blocks the third option), because there is no silver bullet -- forget about 4G networks coming to the rescue. They won't begin to get any serious deployment until 2015.