So, there you have it. We’re facing a ‘mobile video tsunami’, according to Matt Stagg, Senior Manager of Network Strategy at UK mobile operator Everything Everywhere (EE) – speaking on the day the 4G auctions were announced.
And the only way to deal with that is, of course, to give mobile operators even more spectrum. Today the 800MHz band, tomorrow 700MHz, and (who knows?) perhaps they will stake a claim to 600MHz next.
But a few inconvenient pieces of evidence are beginning to emerge which challenge this narrative.
Cisco recently had to revise downwards its influential VNI Global Mobile Data Traffic Forecast. It had previously predicted a 2011-2016 global CAGR of 78%, whereas in its latest update, it predicts a 2012-2017 global CAGR of 66%.
Cisco rather disingenuously explained that “the slight slowing in the growth rate is a typical example of S-curve growth, but the actual amount of traffic continues to represent significant growth.”
Well, yes, it is typical of S-curve growth as it begins to saturate, but by definition that means the growth-rate is going to keep on decreasing year-on-year and eventually tend towards zero (either that, or it’s not an S-curve!). Indeed, Cisco forecasts that global growth in 2017 is now projected to be 50% YOY, down from 70% in 2012.
In its comments on the Western European market, where the slowdown has been particularly conspicuous, Cisco attributed the phenomenon in part to the fact that most mobile users have now been moved off unlimited data plans.
This correlates with its separate observation that the amount of mobile traffic being off-loaded to fixed networks in Western Europe is increasing. In other words, mobile phone customers are being cautious about incurring high 3G data charges, and using Wi-Fi to connect instead where they can.
So no tsunami there, then.
Two other straws in the wind….
Earlier this month, Gartner reported that the number of mobile phones sold globally has declined YOY for the first time since 2009. Yes, smartphones are taking a bigger slice of the pie (over half of the market this year, for the first time) – but the less-featured phones no-one’s buying any more are the ones that, on the whole, are only able to use 2G and 3G networks – and which don’t incorporate Wi-Fi tuners. So that will only accelerate the off-loading phenomenon.
Meanwhile, it doesn’t look as if 4G is going to change the picture very much. France Telecom and SFR in France, Vodafone in Germany, and, yes, EE in the UK, have all recently cut their 4G pricing, in the face of subscriber reluctance to pay more for applications requiring higher data-speeds.
It is, I suppose, possible that mobile consumers will suddenly rediscover an enthusiasm for mobile broadcast video or face-to-face video calling regardless of the cost (both of which applications, by the way, have proved conspicuous damp squibs in the past) but don’t bet on it.
And if they don’t, perhaps the mobile operators will then let us know what all this new 4G bandwidth is going to be filled with?
It wouldn’t be the first time they’ve sat on unused spectrum, which raises a whole new discussion about the wisdom of awarding exclusive licences in the first place – but we’ll leave that one for another day.
