Unlimited drives 2X increase in mobile data consumption, but 5G outlook still cloudy: Chetan Sharma

The move to unlimited data increased traffic on networks, according to Opanga Networks. (Chetan Sharma and Opanga Networks)

SEATTLE—Here at his Mobile Future Forward event, analyst Chetan Sharma of Chetan Sharma Consulting pointed to research that shows the wireless industry’s move to unlimited wireless data services has resulted in a 2X increase in overall data consumption.

However, Sharma cautioned, that rise doesn’t necessarily indicate enormous, pent-up demand for 5G wireless services.

Specifically, during his morning presentation, Sharma pointed to research from Opanga Networks that showed the average user data consumption over an average 24-hour period dips during the night and then rises again during the day, with spikes of usage. And, following the industry’s overall move toward unlimited data pricing plans, users’ overall data consumption both leveled out during the day and rose by a factor of two.

Based on these findings, Sharma said, wireless network operators now have some serious issues to address. “The way you think about the network, plan for the network, completely changes,” he noted.

To be clear, Sharma in his presentation didn’t provide any details on the data from Opanga Networks, including how it was obtained and what exact time periods it covers. Both Sprint and T-Mobile have long offered unlimited data plans, but throughout the course of this year both Verizon and AT&T have launched their own unlimited data offerings. Further, the overall industry race to unlimited data this year has resulted in a significant decline in the cost of unlimited service—according to research firm Mobile Experts, the cost of a GB of wireless data has dropped from $9 to just $1.80 over the course of the past year—as well as heated competition among the nation’s four nationwide wireless operators.

As for Opanga Networks, the company sells what it calls “Software Enabled Network Densification” to wireless carriers that Opanga said helps mitigate network congestion caused by video traffic.

Opanga’s findings dovetail somewhat with findings from internet traffic monitoring company OpenSignal and cited by T-Mobile. “Six months after reintroducing unlimited plans, Verizon and AT&T experienced a marked decline in 4G speeds in our tests,” OpenSignal said in its report. “The impact appears to have hit Verizon the most. Its average LTE download test fell 2 Mbps to 14.9 Mbps in the six months between reports.”

Both AT&T and Verizon have disputed those findings, however.

In his presentation, Sharma also discussed the industry’s gradual move to 5G network technology, which promises to provide faster speeds and more network capacity. Sharma noted that, partly due to forthcoming 5G networks, the cost of mobile data may well reach a point where it is less expensive than fixed internet access services.

However, Sharma also offered a warning on the transition to 5G. He pointed out that, during the wireless industry’s previous transitions to next-generation network technologies, reality has often veered wildly from expectations. “We should be cautious how we predict forecasts,” he said.

Specifically, he noted that the expectations associated with the transition to 2G were underhyped, the transition to 3G technologies was mostly overhyped, and the transition to 4G largely exceeded expectations. Thus, he said, it’s reasonable to assume that the overhyped/underhyped cycle may continue into 5G, which would mean that today’s expectations for 5G are overhyped, and the actual implementation of 5G won’t meet today’s expectations.

Sharma again cautioned, however, that it’s difficult to predict how network transitions might ultimately unfold.