Light Reading
The vendor's latest data-deluge warning says LTE and Wi-Fi offload are offsetting some of the tremendous growth in tiered data usage

Cisco: Tiered Pricing Drives More Data Usage

Sarah Reedy
LR Mobile News Analysis
Sarah Reedy, Senior Editor
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
shygye75
50%
50%
shygye75,
User Rank: Light Beer
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.

Flash Poll
LRTV Custom TV
Why SPs Should Consider Cisco's EPN

8|27|14   |   5:40   |   (0) comments


Sultan Dawood from Cisco discusses Cisco's EPN, which enables SPs to build agile and programmable networks delivering new network virtualized services using Cisco's Evolved Services Platform (ESP).
LRTV Huawei Video Resource Center
Huawei’s Showcase @ Big Telecom Event 2014

8|26|14   |   2.56   |   (0) comments


SoftCOM is Huawei's framework for telecom business and network transformation. Haofei Liu, Solution Marketing Manager, Carrier Business Group, Huawei, showcases Huawei's SoftCOM architecture in this video.
LRTV Huawei Video Resource Center
Huawei @ BTE 2014: Director of Integrated Solutions on SoftCOM & NFV Monetization

8|26|14   |   4.43   |   (0) comments


Libin Dai, Director of Integrated Solutions, Carrier Business Group, discusses Huawei's SoftCOM and NFV monetization. Huawei believes that NFV monetization should be service-driven rather than network-driven, and that operators should have network transformation, service transformation and a compatible and collaborative ecosystem in place in order to deploy NFV.
LRTV Huawei Video Resource Center
Huawei @ BTE 2014: Director of US NFV Lab on CloudEdge & the Future of NFV

8|26|14   |   4.06   |   (0) comments


Sean Chen, Director of US NFV Lab at Huawei, discusses Huawei's new approach to NFV in open collaboration. Huawei believes that through Proof of Concept tests, it could help operators learn and communicate with the industry more effectively. Sean believes that successful implementation of NFV should have its values reaching to end users and discusses how Huawei's ...
LRTV Huawei Video Resource Center
Huawei's Highlights @ Big Telecom Event 2014

8|26|14   |   3.34   |   (0) comments


At the Big Telecom Event in Chicago Huawei showcases its high-level strategy, the SoftCOM architecture, which helps operators reduce the cost of ownership of their network infrastructure and generate additional revenue in the ICT service environment. Huawei showcases over 30 pilot programs from across the globe, focusing on the industry-leading commercial ...
LRTV Custom TV
VeEX – Live from the Show

8|21|14   |   5:58   |   (0) comments


An overview of VeEX Test and Measurement solutions including TX300S multi-service test set with VeExpress cloud-based management system, UX400 universal modular platform supporting 100G testing, and the redesigned RXT modular platform.
LRTV Custom TV
Transitioning CE 2.0 Networks Into the SDN & NFV Era With Telco Systems

8|19|14   |   5:19   |   (0) comments


Telco Systems' Ariel Efrati (CEO) and Moshe Shimon (VP of Product Management) discuss virtualization and how the company's new Open Metro Edge solution utilizes the SDN and NFV concepts to accelerate and orchestrate service delivery through its innovative product portfolio and software applications.
LRTV Custom TV
NFV Myths: Is NFV Still Several Years Away?

8|11|14   |   1:13   |   (0) comments


Some say that NFV (network functions virtualization) is still several years away from being implemented on mobile operator networks. This isn't the case. Operators can get started on their paths to NFV now, as this short video from Skyfire shows.
LRTV Custom TV
A New Security Paradigm in SDN/NFV

7|28|14   |   02:54   |   (0) comments


Paul Shaneck, Global Director Network Solutions for Symantec, discusses the evolving virtualized network, explaining how Symantec is leading the security discussion as it relates to SDN and NFV, and helping to ensure the network is protected and compliant.
LRTV Documentaries
Sprint's Network Evolution

7|24|14   |   14:59   |   (0) comments


Sprint's Jay Bluhm gives a keynote speech at the Big Telecom Event (BTE) about Sprint's network and services evolution strategy, including Spark.
LRTV Documentaries
BTE Keynote: The Software-Defined Operator

7|24|14   |   18:43   |   (1) comment


Deutsche Telekom's Axel Clauberg explains the concept of the software-defined operator to the Big Telecom Event (BTE) crowd.
Light Reedy
Numbers Are In: LR's 2014 Salary Survey

7|24|14   |   1:25   |   (7) comments


Our fourth annual Salary Survey paints a picture of who's hiring, firing, earning, and yearning for a change in the telecom industry.
Upcoming Live Events!!
September 16, 2014, Santa Clara, CA
September 16, 2014, Santa Clara, CA
September 23, 2014, Denver, CO
October 29, 2014, New York City
November 6, 2014, Santa Clara
November 11, 2014, Atlanta, GA
December 9-10, 2014, Reykjavik, Iceland
June 9-10, 2015, Chicago, IL
Infographics
Hot Topics
Comcast Streams Back to School
Mari Silbey, Independent Technology Editor, 8/21/2014
Level 3 Does Big Data Differently
Carol Wilson, Editor-at-large, 8/21/2014
T-Mobile: Small Cells? We're Dense Already
Dan Jones, Mobile Editor, 8/22/2014
Utilities to Pump $11.2B Into Smart Grid – Study
Jason Meyers, Senior Editor, Utility Communications/IoT, 8/26/2014
Rogers, Shaw Take Aim at Netflix
Mari Silbey, Independent Technology Editor, 8/26/2014
Like Us on Facebook
Twitter Feed