It looks like wireless operators were right when they said LTE would bring fatter pipes, but customer usage would just expand to fill them. According to a new study from JDSU, LTE subscribers are using more than 10 times more data than they did on 3G devices.
This is the fourth year that Arieso, which was acquired by JDSU (Nasdaq: JDSU; Toronto: JDU) last year, has put out a study on data trends. It's also the fourth year that it's seen more growth in data usage. (See JDSU Buys Mobile OSS Vendor for $85M.)
While LTE users are consuming 10 times as much data as their peers, the consumption isn't shared amongst them. Only 0.1% of 4G users consume more than half of the entire LTE downlink data. On 3G, 1% of users consumed half of the downlink data, so the number has increased 10-fold. (See Mobile Data Trends in Developing & Developed Markets.)
The usage isn't shared equally amongst handsets either. Like last year, iPhone users remain the most data hungry. Users of Apple Inc. (Nasdaq: AAPL)'s newest and most high-end LTE iPhone 5S use the most mobile data, consuming seven times more than iPhone 3G users in developed markets and 20 times more than 3G users in developing markets. (See iPhone 5 Is Top Euro Data Hog.)
Apple products made up six of the top ten data-hungriest handsets, alongside two Samsung Corp. phones, one High Tech Computer Corp. (HTC) (Taiwan: 2498), and one from Sony Corp. (NYSE: SNE). Samsung phone owners did top Apple in terms of uplink data, however. Galaxy S4 users uploaded five times more data than iPhone 3G users in developed markets.
It's not just the better phone cameras that are encouraging more uploading. It's also the network itself, according to Dr. Michael Flanagan, CTO of JDSU's Aierso division and the report's author. On 3G, it was a 1:7 ratio of uploads to bytes of data, but on LTE, it's 6:1. The narrowing gap suggests more people are using a greater number of social networking capabilities, he says, which is translating into a 20% increase in user-generated content on devices.
"On LTE, things aren't changing as much from UTMS," he says. "That will stay the case for many years to come, but the ratio of downloading to uploading is in motion, especially for LTE. LTE provides improved uplink speeds, which can motivate uploading content."
The case for small cells
Arieso's report is good for wireless operators, not only in that it shows they were telling the truth about soaring data demands, but that it also provides justification for their small-cell strategies. Flanagan says that the fact that only 0.1% of 4G consumers are using half of the data means operators can identify these users and deploy small cells, or WiFi access points, just in their area. Small cells may not be needed everywhere, but knowing where the extreme usage is coming from helps identify where to start.
"The decisions for small cells really become personal," Flanagan says. "Look for the 0.1%. If you can offload them, you can double your capacity. Each small cell can be written on with a magic marker to say, 'We put this in for you.'"
If that doesn't work, Flanagan suggests limiting support for these users in an effort to encourage them to switch. Churn isn't always bad if the customer who leaves is single-handedly driving expenses so much higher, especially if he or she is vocal about the bad experience on the next network that person lands on.
— Sarah Reedy, Senior Editor, Light Reading