Mobile data explosion: Not the iPhone's fault

Mobile data usage will grow 12-fold by 2014. The culprit? 3G-equipped laptops and netbooks promoted by the carriers

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The good news is that the carriers seem to be making the investments in upgrading their 3G networks. A recent Novarum test on behalf of PC World across 13 cities in the United States, for example, found that AT&T has nearly doubled its 3G access speeds on average -- a sign of increased capacity -- and that Sprint and T-Mobile also increased capacity faster than demand. Only Verizon Wireless seems to be falling behind demand, though its performance is still strong.

The carriers can also shape 3G traffic demand using techniques that don't risk Net neutrality-busting tricks. The easiest is to reduce the subsidies for 3G-equipped netbooks and smartbooks if usage grows too fast for the networks to handle. That'll reduce demand for the devices while the carriers are building out. In addition, their plans need to be month-to-month.

The carriers are already shaping traffic by not offering unlimited data plans for their subsidized 3G netbooks. Instead, they offer 200MB to 250MB of data usage for $40 per month and 5GB for $60 per month, with varying overage charges per megabyte when you exceed those limits. This is the wave of the future: For the forthcoming iPad, AT&T is offering a lower-cost, limited-usage plan (250MB for $15) in addition to the $30 "unlimited" plan (I put "unlimited" in quotes because there are in fact limits hidden in the fine print of the mobile data contracts).

The tiered pricing approach -- which I believe will be replicated on smartphone plans in the not-too-distant future -- employs neutral pricing bands to discourage use of high-bandwidth resources and makes those who require the most pay for their share of the infrastructure to deliver it. And the no-contract approach steers users to Wi-Fi networks that rely on the wired broadband network. I believe not requiring a contract will reduce 3G consumption by those who only occasionally travel outside Wi-Fi zones; they won't use 3G routinely because there's a clear cost for doing so.

Whatever actions the carriers take to keep the capacity/demand equation in balance will remain a mystery unti they do it, of course. But as they're the ones pushing the devices and services that ABI predicts will cause the 12-fold surge in wireless traffic, they're the ones who have the levers to make it all work.

The trends are clear, so let's hope this time the carriers get the balance right. When wireless data demand is 12 times the current load, it won't be just iPhone users who threaten a revolt.

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This article, "Mobile data explosion: Not the iPhone's fault," was originally published at Read more of Gruman et al.'s Mobile Edge blog and follow the latest developments in mobile computing at

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