FaceTime's impact looms over operators

There is a plethora of opinions regarding the pending impact Apple's (NASDAQ:AAPL) FaceTime application will have on cellular networks once the iPhone 5 is released, but operators would probably be wise to pay close attention to any related data crunches generated by the video-chat app.

"If I were a carrier, I'd be rather frightened by FaceTime," Jack Gold, an analyst at J. Gold Associates, told ComputerWorld. "If everybody used FaceTime, bandwidth would go up dramatically, and the user experience would go down."

FaceTime video calling was limited to Wi-Fi in earlier versions of Apple's iOS, but the company has confirmed that FaceTime will work over cellular networks as well as Wi-Fi in iOS 6, the operating system powering the upcoming version of the iPhone. On the other hand, Apple has not confirmed that the iPhone 5--a moniker Apple has also not actually confirmed--will come equipped with LTE compatibility, though most analysts expect it will. And LTE, rather than 3G, is what is needed to offer the speeds that FaceTime requires to function without suffering from latency or freezing of video frames.

Despite fears that a mobile network could become utterly overwhelmed with a crush of FaceTime users all accessing the app in a particular location at a particular time, under most circumstances an LTE network should be able to accommodate FaceTime video chatting.

The world's largest LTE operator, Verizon Wireless (NYSE:VZ), says its LTE customers experience average data rates of 5 to 12 Mbps on the downlink and 2 to 5 Mbps on the uplink in real-world, fully loaded network environments. That should leave lots of spare capacity for most video chat sessions, which can use up 3 megabytes of data per minute, though the exact rate depends on encoded software, said Wendy Cartee, vice president of product and technical marketing for JuniperNetworks, in the ComputerWorld article.

Further, not every person who gets an iPhone 5 will be able to launch a FaceTime video chat session with a mobile pal, unless that user also happens to have a compatible iOS device running FaceTime over a cellular or Wi-Fi network. That's because FaceTime requires compatible clients on each end.

Aside from the incompatibility hurdles inherent in FaceTime, data pricing is one of the best defenses mobile operators have for protecting their networks from being overwhelmed by a sudden rush of iPhone 5 users whose new devices have been freed to access FaceTime over cellular. In fact, it has been suggested that the shared-data plans introduced over the summer by both Verizon Wireless and AT&T (NYSE:T) were in part preemptive responses to the potential impact of FaceTime's new capabilities in iOS 6.

AT&T, in fact, already announced even before the iPhone 5's release that it will support FaceTime video calling over cellular at no extra charge, but only for its Mobile Share data plan customers. Public interest groups, including Public Knowledge and Free Press, have argued that the move discriminates against certain customers and violates FCC net neutrality rules, charges the operator denies.

However, AT&T admits to sweating out the potential impact of FaceTime on its network. In a company blog post, Bob Quinn, AT&T's senior vice president of federal regulatory, wrote that the operator is limiting the use of FaceTime over cellular to AT&T Mobile Share customers "out of an overriding concern" of the effect the app may have on AT&T's network and the overall customer experience.

"We will be monitoring the impact the upgrade to this popular preloaded app has on our mobile broadband network, and customers, too, will be in a learning mode as to exactly how much data FaceTime consumes on those usage-based plans," said Quinn.

Like AT&T and Verizon, Sprint Nextel (NYSE:S) also carries the iPhone, but unlike the other two, Sprint has pledged to keep offering unlimited data all of its smartphone customers, including those who buy the new iPhone.

T-Mobile USA, meanwhile, should escape potential FaceTime data crunches unscathed, as least for the time being. The operator does not offer the iPhone, though some 1 million unlocked iPhones are reportedly on its network. However, those devices cannot get high-speed data service because they access only T-Mobile's 1900 MHz frequencies, which support its 2G GSM network, rather than the 1700/2100 MHz AWS band where T-Mobile offers WCDMA/HSPA. T-Mobile is refarming its 1900 MHz spectrum by reducing the spectrum it dedicates to GSM and opening up the frequencies to WCDMA/HSPA, so unlocked iPhones will soon be able to get high-speed data service over T-Mobile's 1900 MHz frequencies.

For now, however, T-Mobile is using a new round of unlimited data pricing as an offensive jab at rivals that will carry the iPhone 5, which is widely expected to be introduced Sept. 12. T-Mobile's new unlimited pricing offer begins a week earlier, on Sept. 5.

For more:
- see this ComputerWorld article
- see this AT&T blog post

Related articles:
AT&T: FaceTime data plan restrictions do not violate net neutrality
T-Mobile revives $30 unlimited data for postpaid smartphones
AT&T to offer FaceTime over cellular for free - for Mobile Share customers
Apple's Wi-Fi Plus Cellular feature includes FaceTime option
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Apple adds cellular data support for FaceTime video chatting