The availability of LTE service is prompting mobile customers to consume substantially more data, particularly if those customers have large data plans, according to a new white paper.
The white paper, from device-based mobile analytics vendor Mobidia and consultancy Informa Telecoms & Media, examined data usage patterns in the three leading LTE markets: Japan, South Korea and the United States. The research specifically targeted data use by customers of U.S. operators Verizon Wireless (NYSE:VZ) and AT&T (NYSE:T); Japan's NTT DoCoMo; and South Korean operators SK Telecom LGU+ and KT.
The research revealed that while users of 3G smartphones based on Google's (NASDAQ:GOOG) Android operating system in the United States racked up on average 956 megabytes per month of data use, their LTE Android counterparts were responsible for nearly 1.3 gigabytes, a difference of 36 percent. In Japan, LTE Android users used 67 percent more cellular data than 3G Android users, and in South Korea, the comparable difference in consumption was 132 percent.
According to the white paper, the particularly strong LTE usage in South Korea is attributable to the fact that the three nationwide operators' LTE networks have achieved close to 100 percent population coverage. and their networks offer fast peak speeds along with attractively structured and priced LTE tariffs.
Mobidia and Informa noted a strong symmetry in the change in cellular data usage by Verizon Wireless and AT&T customers, which likely reflects similarities in the operators' tariff structures and LTE device portfolios. Differences in the operators' older 3G technologies--CDMA 1x EV-DO at Verizon and HSPA/HSPA+ at AT&T--had minimal impact on average data consumption among their 3G customers.
Elsewhere, aggressive tariffs have made a difference in data uptake. In South Korea, average LTE data usage at LGU+ has grown at a much faster rate relative to its two main competitors, SK Telecom and KT, a difference the white paper attributed to aggressive pricing by LGU+.
Mobidia and Informa also found that the adoption and use of high-bandwidth applications such as YouTube among LTE smartphone users relative to 3G smartphone users is significantly higher, likely due to "the parallel transition of users to tariffs with significantly larger inclusive monthly data volumes." Likewise, the rollout of LTE is said to aid operators in their effort to convert users away from unlimited data plans and push them toward usage-based plans with higher inclusive data volumes.
LTE smartphone customers at AT&T and Verizon are more likely to have signed up for larger-sized volume-limited data plans. However, about 10 percent of AT&T's smartphone base remains on unlimited plans. "There is still a material volume of users that have taken advantage of the possibility to 'grandfather' legacy data plans for their 4G LTE devices," said the white paper.
While the numbers of users on unlimited plans at Verizon is double that of AT&T, Verizon has nonetheless managed to reduce its number of unlimited plan users. In the user sample studied, Verizon's number of unlimited plan users dropped from 19 percent on 3G to 16 percent on LTE.
Ultimately bigger data buckets beget more data usage regardless of air interface. "It is clear that the inherent psychological 'comfort blanket' of a larger data plan plays an incredibly important role in encouraging and stimulating adoption of heavier bandwidth applications," said the white paper.
World's largest LTE operators by total LTE connections, 3Q12
The research also highlighted an intriguing trend in that Korean LTE smartphone users have reduced dependence on Wi-Fi. "The distribution of traffic originating via Wi-Fi networks compared to cellular networks drops from 71 percent of the total average traffic amongst 3G smartphone users to 52 percent for 4G LTE smartphone users," said the white paper. "In absolute terms, Mobidia's data highlights that average Wi-Fi usage actually declines marginally for Korean 4G LTE smartphone users compared to 3G smartphone users."
Nonetheless, Wi-Fi continues to account for more than half of all smartphone-originated traffic and remains the primary form of data connectivity for Korean LTE subscribers.
Absolute Wi-Fi usage volumes rose for LTE smartphone users in the United States and Japan, though at a significantly lesser rate than for cellular-originated traffic, as demonstrated by 4G LTE vs. 3G smartphones users in those markets. "This suggests that in these markets, there is an elasticity-of-demand effect in play with incremental usage generated across both cellular and Wi-Fi networks," said Mobidia and Informa.
- see this Mobidia white paper
- see this Mobidia release
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