According to two new reports, the embrace of unlimited data pricing plans in the United States and elsewhere is pushing dramatic increases in the amount of data traveling over operator networks. Indeed, according to NPD, the average U.S. smartphone user now consumes a total of 31.4 GB of data on a monthly basis (a figure that includes both Wi-Fi and cellular consumption). That’s up fully 25% from a year prior.
“Unlimited data plans have become the de facto offering in the market and the significant variance between consumption levels of unlimited plan and limited plan users can be alarming for mobile carriers, as networks become increasingly congested,” said Brad Akyuz, director and industry analyst for NPD’s Connected Intelligence, in a release. “When users migrate from limited plans to unlimited plans, their consumption behavior shifts in favor of using cellular data more regularly. Users on unlimited plans don’t regularly seek Wi-Fi connectivity for data-hungry transactions such as video streaming, application updates, and downloads as they are not concerned about data overage fees.”
According to NPD’s Connected Intelligence Smartphone and Tablet Usage report, cellular data use among consumers with unlimited plans is 67% higher than that of those with limited plans, mainly because limited-plan users instead rely more on Wi-Fi. The firm also found that iPhone users tend to consume more cellular data than Android users, who often rely on more Wi-Fi connections.
Interestingly, NPD also found that limited-plan users consumed 8% more overall data than their unlimited-plan counterparts.
Not surprisingly, video is driving the bulk of that usage. NPD reported that streaming video remains the leading driver of cellular and Wi-Fi data consumption, accounting for 83% of total data usage. Moreover, the number of users accessing video on their phones is growing: The firm said that 67% of all smartphone users accessed video in the third quarter of last year, up from 57% in the prior quarter.
NPD derives its figures from roughly 2,500 U.S. users who opt in to the firm’s VPN-based monitoring service. NPD said half of those users agreed to share their data plan information with the firm.
NPD’s findings largely dovetail with a similar report from research firm Strategy Analytics, which surveys global operators’ mobile data traffic growth. Strategy Analytics said worldwide mobile data traffic grew 115% globally year on year, partly due to the rise of unlimited data plans in India, China and elsewhere.
"It is encouraging to see more success stories from operators using unlimited or zero-rated pricing to unlock growth in both revenue and profitability,” Phil Kendall, Strategy Analytics’ service provider group director, said in a release. “The success of China Unicom's unlimited plans and collaborations with local Internet giants highlights the importance of partnering with content providers to add value to data plans."
Indeed, the research firm said that unlimited plans grew traffic in China by 166% year-on-year in the third quarter, which Strategy Analytics said “generated a healthy recovery in both service revenue and EBITDA.”
Unlimited data plans have been widely available in the United States for roughly a year now. Verizon launched an unlimited plan in February, following the leads of both T-Mobile and Sprint and reversing its long-held opposition to the model. Meanwhile, AT&T made its unlimited offering available to all customers—not just those with DirecTV subscriptions. The unlimited craze quickly proved costly for carriers, Cowen and Company noted earlier this year, but the segment has since stabilized as carriers have increasingly focused on maximizing profits rather than simply growing market share.