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Mobile Data Booming But Providers Need To Sell Higher Caps

Mobile Data Booming But Providers Need To Sell Higher CapsGlobal mobile data traffic is set to reach 52 million TB this year, according to Gartner, with the rapid growth set to continue through to 2018, at which point mobile data levels are estimated to reach 173 million TB.

“Mobile data traffic is soaring worldwide, more than tripling by 2018,” Jessica Ekholm, Gartner research director, commented.

“New, fast mobile data connections (3G and 4G) will grow more slowly, from 3.8 billion in 2015 to 5.1 billion in 2018, as users switch from slower 2G connections and consume more mobile data.”

In Australia, Telstra, Optus and Vodafone are investing heavily in 4G networks, with telcos vying for consumer attention in the rapidly growing mobile data market. Recent research has shown that internet users are increasingly going mobile, with data usage on the rise.

Telcos have introduced a number of initiatives this year, from increased data caps to month-to-month data rollover to inclusive video streaming services, in an effort to cater to the growing data demand.

A survey conducted by Gartner of 1,000 US and 1,000 German smartphone users has revealed that German users are more restricted by their data plans and therefore less likely to watch videos or consume large amounts of data via cellular networks, effectively meaning less revenue for communication service providers (CSPs) in Germany.

“With video usage as a percentage of total data usage set to rise from 50 per cent now to 60 per cent by 2018, we should expect CSPs to offer the best-of-breed video experience to consumers,” Ekholm commented.

“This involves using video optimisation technologies and caching content closer to the consumer. Contract plans that single out video traffic to allow users to reach a certain cap (without touching their contract data cap) will increase usage and revenue for CSPs and meet consumer demand for more mobile video.”

Ekholm additionally noted the survey showed YouTube is increasingly being used to view videos for longer periods of time, however Germans were less inclined to stream videos for a longer period of time in comparison to their US counterparts, in line with their more restrictive data caps.

“The key to obtaining long-term revenue growth for CSPs is how effectively they can market and sell the value of more expensive high-cap or unlimited data plans to their customers,” she commented.

“The evidence is that once customers commit to a larger plan, their usage habits change significantly, resulting in longer-term revenue benefits for CSPs. This shows evidence of pent-up demand and an opportunity for those CSPs able to create the right package.”