This year, the mobile industry is experiencing a lot of buzz around mobile data offload with operators increasingly focusing on how to manage their spectrum resources. As the wider telecom industry understands, mobile data traffic continues to grow at an unprecedented pace and is increasingly outstripping the network capacity. This growth of data traffic comes courtesy of browsing-friendly smartphones and tablets allied to a host of other Internet capable devices and dirt-cheap data plans. Offloading data to complementary networks continues to offer a tremendous opportunity for the network operators to alleviate the capacity crisis and certainly this has been a key focus for them over the last one year.
It is well understood that the proportion of in-building mobile data consumption is markedly higher than that of consumption in public places and while in motion. While historically this has been problematic for operators, given the issues surrounding in-building reception, it also provides the operators with the opportunity to offload the data traffic from the cellular network to other networks based on Wi-Fi and small cells. The availability of Wi-Fi hotspots (in restaurants, coffee shops, airports etc.) and already installed Wi-Fi access points at homes defaults the data connection over to the Wi-Fi network providing seamless connectivity. Meanwhile, small cell technology--deployed primarily for improving coverage--also provides an opportunity for data offload. In addition, offloading has the potential to create new services and applications and to enhance the usage of existing services.
However, we repeatedly have stressed the importance of understanding the net impact that both data offload and data onload have on the operator's network. From an operator's perspective, it is important for them to realize that despite the implementation of offloading measures, migration of data traffic from fixed to mobile will increase the strain on the cellular network. We have referred to this migration of data traffic as data onload.
To put this in simple terms, the data onload or data migration from fixed to mobile is the data through the cellular network, via mobile broadband dongles or 3G/4G cards, from devices such as connected netbooks, laptops, game consoles and e-Readers, whose primary mode of connectivity is fixed. For example, most users connect their netbooks via a USB 3G modem while commuting to work; I have seen my friend desperately trying to use a MiFi mobile broadband modem device with 3G capability to connect to his Xbox Live, until his Sky broadband connection arrived and put him out of his misery.
This is another aspect to take into consideration; increasingly, just like my Xbox'ing friend, consumers are tethering their mobile devices to laptops and netbooks for data connectivity, their bundled and (hopefully) unlimited data plans providing them with the advantage of requiring no modem, new configurations or any other gadgets. With the introduction of 4G speeds, users are expected to increasingly take advantage of tethering in the future. The increased performance of mobile broadband services when compared to fixed broadband services in many regions of the world, and the low penetration of fixed broadband penetration in emerging markets is the prime factor in play here. The majority of the data onloaded onto the cellular network will be concentrated in regions where 3G/4G network are ubiquitous.
This illustrates why it is important for network operators to be cognizant of the net impact that both offload and onload have on the total data traffic through the network. We recognize that even though data offload alleviates some of the operator's network congestion, a significant proportion of the offload could itself be offset by fixed to mobile migration of data. So really, for the mobile operators, it is all about balancing the load on their networks.
As we observe in our latest research report, Mobile Data Offload & Onload, operators will face significant additional pressure over the next five years from this onloaded traffic. Juniper Research estimates that 24 percent of all traffic generated from those netbooks, laptops, games consoles and e-Readers which have an active 3G/4G connection will be onloaded to the cellular network by 2016. Put another way: this translates to 7,500 PB (Petabytes) of traffic, which equates to a voluminous 3 trillion music track downloads.
However, the actual volume of data traffic offloaded from mobile networks will continue to grow strongly throughout the next five years as the total volume of data traffic delivered to mobile devices accelerates.
In summary, data offload will continue to co-exist along with operators 4G network strategies (not just 3G) and provide a "big-win" opportunity for the operators from a value perspective. Even though 4G is a very promising opportunity from a capacity and performance standpoint, it is still constrained as a resource and very expensive. Hence, it is critical that operators make use of offloading technologies to augment 4G or LTE networks.
Nitin Bhas is a Research Analyst with Juniper Research and the author of the recently published report Mobile Data Offload & Onload: Wi-Fi & Small Cell Strategies 2012-2016. His areas of focus include mobile networks, technologies and handsets.