The reason for the need to improve the 3G infrastructure is clear: Smartphone users actually use the data services. The CTIA industry trade group reports that the typical iPhone user spends 60 minutes a day using the device, versus 40 minutes for a regular cell phone user. The two groups spend the same number of minutes (28) talking and use the same amount of SMS messaging, but iPhone users spend 5.5 minutes a day on the Internet, versus 1.2 for regular cell phone users, and iPhone users spend 7.2 minutes a day using e-mail versus 1.2 minutes for cell phone users. iPhone users also spend about five times as much time playing games and listening to music on their devices as cell phone users do -- activities that can use either network resources or local resources on the device.
Another metric: The average iPhone users consume 200MB per month of data bandwidth, versus 20MB for other smartphone users. On average, 3G-enabled laptop users consume 1GB of data bandwidth per month.
These usage patterns explain why U.S. 3G networks are under strain. But Morgan Stanley's report shows 2010-11 as the period in which the networks will become capable of supporting the growing data usage by iPhones and other devices, such as the rapidly expanding Android contingent.
Morgan Stanley notes that smartphone users' peak bandwidth usage is now 90 percent in major U.S. markets -- anything over 75 percent peak demand is considered a warning sign of insufficient capacity. Morgan Stanley preduicts that by 2011, U.S. carriers will have made enough improvements in backhaul infrastructure (the backbone that connects the cell towers to the Internet and to each other), and cell phone radio sites (to handle increased local access demand) will push the peak traffic usage down to 65 percent of capacity. Data usage will grow, but the enabling infrastructure will grow faster.
And before you think this should mean higher bills, Morgan Stanley also says that carriers can make these improvements without spending extra money, as part of their existing 2G-to-3G transition plans. In fact, these improvements will cut the carriers' costs of providing mobile data in half on a per-megabit basis. Data plan prices should come down, not go up, if the carriers pass on the savings.
These various surveys show that a dynamic, heterogeneous (even if iPhone-led) mobile reality is around the corner. Get ready for it.
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