& cplSiteName &

Cisco: Tiered Pricing Drives More Data Usage

Sarah Thomas
2/14/2012
50%
50%

Mobile data traffic will increase 18-fold between 2011 and 2016, reaching 10.8 exabytes per month, according to Cisco Systems Inc. (Nasdaq: CSCO)'s latest calculations, but the data deluge isn't a result of those unlimited plans left on the market.

Consumers on tiered data plans are using more data than those on unlimited plans, says Thomas Barnett, Cisco's senior manager of service provider marketing.

Cisco has been studying tiered data plans at two global, Tier 1 wireless operators for the past 21 months. While at the beginning, the top 1 percent represented 52 percent of traffic on the networks, now that 1 percent only represents 24 percent of traffic, while the top 20 percent continues to grow in usage, Barnett says.

The wireless operators offering tiered plans all have different ways of dealing with their highest data users. For example, in the U.S., T-Mobile US Inc. throttles once a user reaches 5GB; Verizon Wireless does so only when it has to at a congested cell tower; and AT&T Inc. (NYSE: T) throttles its highest users for an entire billing cycle. (See AT&T's Prices Go Up, Up, Up!, T-Mobile Shakes Up Pricing Sans Unlimited Data and Is Backhaul Bottlenecking Verizon's LTE?)

But, no matter how it is handled, that traffic is harder to manage when it's 20 percent of users causing the backup. Cisco found that traffic on tiered plans increased 169 percent in the past 21 months versus 83 percent for unlimited plans. Cisco predicts that 60 percent of mobile users, or 3 billion people, will use more than one 1GB of mobile data traffic per month in 2016, whereas in 2011, only 0.5 percent did. (See Cisco Projects Massive Mobile Data Growth.)

"You might think they'd grow faster with all-you-can eat, but I think it's a testament to the fact that service providers are educating users more on their impact and IP footprint," Barnett says. "People understand they have a 2GB or 3GB cap or whatever, so they are consuming as much as they can to get their money's worth. Those with unlimited aren't concerned, but aren't using as much."

LTE, Wi-Fi to the rescue
Consumers are likely to flirt with the data cap more once they move to Long Term Evolution (LTE). Now only 0.2 percent of mobile connections are based on LTE, but they are generating 28 times more traffic than non-4G connections. Cisco says the number of LTE connections will grow to 36 percent of the total by 2016. With that will come more high-quality content, more devices, more users and more mobile video, which will represent 71 percent of all traffic by that time.

Luckily for wireless operators, consumers are also turning to Wi-Fi more and more. On a global scale, 11 percent of traffic was offloaded to Wi-Fi in 2011; that will double to 22 percent by 2016. Looking at connected tablets, the fastest growing data category, 60 percent are used on Wi-Fi today. (See Cisco: Tablets Hog More Data Than Smart Phones.)

Without offload, Cisco says the 2011-to-2016 compound annual growth rate of global mobile data traffic would be 84 percent instead of 78 percent.

So, can the wireless operators handle the ongoing flood of traffic? Cisco wants to sell them the gear to do so, of course, but Barnett thinks the answer is yes, with the help of 4G, Wi-Fi and continued infrastructure investments.

"Through a combination of LTE and offload strategies, I think they will be able to handle it," he says. "And, the growth we've seen over the past few years has indicated that they can thrive in this environment."

— Sarah Reedy, Senior Reporter, Light Reading Mobile

(1)  | 
Comment  | 
Print  | 
Newest First  |  Oldest First  |  Threaded View        ADD A COMMENT
shygye75
50%
50%
shygye75,
User Rank: Light Sabre
12/5/2012 | 5:42:44 PM
re: Cisco: Tiered Pricing Drives More Data Usage


Lots of numbers here, all subject to interpretation in one way or another. I'm not sure there are many obvious conclusions to reach, beyond the idea that mobile network operators are staring up the barrel at demand that will be almost impossible to meet given current spectrum and technology limits.

Educational Resources
sponsor supplied content
Educational Resources Archive
From The Founder
Light Reading today starts a new voyage as part of a larger Enterprise.
Flash Poll
Live Streaming Video
Charting the CSP's Future
Six different communications service providers join to debate their visions of the future CSP, following a landmark presentation from AT&T on its massive virtualization efforts and a look back on where the telecom industry has been and where it's going from two industry veterans.
LRTV Interviews
No Stopping Cable's Ethernet Gains

12|9|16   |     |   (0) comments


Vertical Systems' Erin Dunne explains why US cable operators, which now command a record-high 26% of the Ethernet market, will keep boosting their share.
LRTV Interviews
Fixing IoT Security Is an Ecosystem Challenge

12|9|16   |   05:34   |   (1) comment


Level 3 Communications' Chief Security Officer Dale Drew says service providers, manufacturers and even consumers must combine to halt massive DDoS attacks using IoT devices in botnets. The solution he has in mind includes reputation-based routing by the service provider but also more secure endpoint devices and greater consumer awareness.
LRTV Interviews
Cox Clears $2B in Business Revenue

12|8|16   |     |   (0) comments


Cox's Jeff Breaux discusses how the third-largest US MSO will reach the $2 billion revenue mark this year and plans to hit $3 billion by 2021
LRTV Interviews
Can Cable Climb Upmarket?

12|7|16   |     |   (0) comments


Carol Wilson and Alan Breznick assess cable's prospects for winning more enterprises in a landscape rocked by corporate M&A activity.
Women in Comms Introduction Videos
TalkTalk Exec: Find Your North Star at Work

12|7|16   |   3:38   |   (1) comment


Women need to find their purpose, a professional North Star, and create a personal board for themselves, according to Alex Tempest, director of partners at TalkTalk Business.
LRTV Interviews
Verizon: Beware Unknown Unknowns

12|7|16   |   04:58   |   (0) comments


Chris Novak, director of the Verizon Enterprise Solutions Risk Team, explains that enterprises who don't conduct a thorough audit of their assets often leave some things unprotected because they don't know they exist. Many times these unprotected assets are part of corporate M&A activity but left unshielded they can become a hacker's playground, he tells Light ...
LRTV Interviews
ETSI's CTO Talks NFV, 5G & NGP

12|5|16   |   09:45   |   (0) comments


Adrian Scrase, CTO at standards body ETSI, talks about the various initiatives and specifications developments related to NFV, 5G and NGP (next-generation protocols) that will underpin next-gen networks.
Women in Comms Introduction Videos
Korn Ferry Consultant: How to Find, Cultivate & Be the Best Talent

11|30|16   |   4:10   |   (2) comments


Erin Callaghan, a managing consultant for Korn Ferry Futurestep, shares strategies for companies to improve how they recruit and for women to ensure they don't get lost in the pipeline.
LRTV Custom TV
We Can Make the World More Sustainable

11|29|16   |     |   (0) comments


GeSI is a global e-Sustainability Initiative organization bringing together 40 big multinational companies around the world. According to GeSI's report, information and communication technology can make the world more sustainable. Luis Neves, chairman of GeSI, shared with us his opinion at Ultra-broadband Forum (UBBF2016).
LRTV Custom TV
Finding a New Way to Engage Customers & Drive Revenue

11|29|16   |     |   (0) comments


Mobile revenues are declining. Digicel, a player in the Caribbean telecommunications/entertainment space, has found a new way to engage customers and drive revenue. John Quinn, CTO of Digicel, shared with us its story at Ultra-broadband Forum (UBBF2016)
LRTV Custom TV
Do You Really Need Gigabit Infrastructure?

11|29|16   |     |   (0) comments


Altibox is the biggest fiber-to-the-home (FTTH) player and the largest provider of video and TV in Norway. They started out with zero customers in 2002. Now they have close to half a million households and companies attached to their FTTH business. Nils Arne, CEO of Altibox shared with us their story and insight on 5G at Ultra-broadband Forum (UBBF2016).
LRTV Custom TV
BTís Openreach Strategy & Its Updates in 2016

11|29|16   |     |   (0) comments


A lot of developments at Openreach this year in terms of strategy and planned investments. Peter Bell, CIO of Openreach BT, shared with us the updates of Openreach at Ultra-broadband Forum (UBBF2016).
Upcoming Live Events
May 16-17, 2017, Austin Convention Center, Austin, TX
All Upcoming Live Events
Infographics
Hot Topics
Cable Nodes Becoming a Choke Point
Brian Santo, Senior editor, Test & Measurement / Components, Light Reading, 12/5/2016
Consolidated Snaps Up Fairpoint for $1.5B
Iain Morris, News Editor, 12/5/2016
Small Arctic ISP Caches Netflix in New Way
Mari Silbey, Senior Editor, Cable/Video, 12/7/2016
Like Us on Facebook
Twitter Feed
BETWEEN THE CEOs - Executive Interviews
Eyal Waldman, CEO of Mellanox Technologies, speaks to Steve Saunders, CEO of Light Reading, for an exclusive interview about the 100 GB cable challenge, cybersecurity and much more.
Join us for an in-depth interview between Steve Saunders of Light Reading and Alexis Black Bjorlin of Intel as they discuss the release of the company's Silicon Photonics platform, its performance, long-term prospects, customer expectations and much more.
Animals with Phones
A Mobile Safari Click Here
Literally.
Latest Comment
Live Digital Audio

Even when there's a strong pipeline of female talent in the comms industry, it tends to leak all the way to the top. McKinsey & Company says women experience pipeline leakage at three primary points: being unable to enter, being stuck in the middle or being locked out of the top. Each pipeline pain point presents its own challenges, but also opportunities to stop the leak. Wireless operator Sprint is making a conscious effort to improve its own pipeline from new recruits to the C-suite, and it wants the rest of the industry to do the same. In this Women in Comms radio show, WiC Board Member and Sprint Vice President of Enterprise Sales Nelly Pitocco will give us her take on the industry's pipeline challenges. Pitocco, who joined Sprint in May and has spent 20 years in the comms industry, will also offer solutions, share how Sprint is tackling the challenge within its own organization and take your questions live on air.