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Wireless network traffic worldwide: forecasts and analysis 2013–2018

  • October 2013
  • 51 pages
  • Analysys Mason
Report ID: 1862684

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Now that the hype surrounding mobile data traffic growth has died down a bit, it is time to re-examine the drivers of mobile (cellular and Wi-Fi traffic. This Report sets the scene for the second half of the decade, when small cells and LTE-A look set to reduce some of the network-side constraints on growth.

About this report

This report presents 5-year forecasts of wireless data traffic worldwide, in eight regions and selected countries. It analyses the key trends in, and drivers and inhibitors of, data traffic.
The forecast dataset underpinning this report covers:
• mobile data – data delivered over mobile (cellular) networks to: handsets (typically smartphones); mid-screen devices (typically tablets); USB modems, routers and other standalone data devices; and M2M devices
• Wi-Fi data – data delivered over private Wi-Fi connections (at home or work) to handsets and mid-screen devices, and data delivered to all devices using public Wi-Fi connectivity.

The report assesses the enablers of future capacity on wireless networks and the cost of supplying that capacity.

It also analyses the trends in private and public usage, and their effect on the use of mobile and Wi-Fi connectivity.

This report is based on Analysys Mason’s:
• internal research and modelling
• consumer surveys on smartphone and tablet usage.

Our forecasts are informed and sense-checked by on-the-ground regional market expertise.

Geographical coverage
Regions modelled:
• Western Europe
• Central and Eastern Europe
• North America
• Developed Asia–Pacific
• Emerging Asia–Pacific
• Latin America
• Middle East and North Africa
• Sub-Saharan Africa
In addition, 22 countries are modelled individually

Major KPIs
• Mobile data
Total volume and average usage for:
- handsets
- mid-screen devices
- USB modems and routers
- M2M
Traffic split by public and private usage

• Wi-Fi data
Total volume and average usage for
- handsets
- mid-screen devices, split by mobile-connected and Wi-Fi-only devices
- laptops (public Wi-Fi connectivity only)
Traffic split by public and private usage

By 2018, the volume of Wi-Fi traffic generated by handsets and mid-screen devices will be five times higher than mobile traffic on these devices

Wireless data traffic on handsets and mid-screen devices is largely generated at home. This varies by region, of course, but we estimate that about 73% of worldwide handset and mid-screen data was generated in the home or place of work (private) in 2012. Excluding Wi-Fi-only mid-screen devices, the proportion was 65%.

This proportion will continue to rise despite the roll-out of increasingly higher-capacity mobile data networks. This is because:
• virtually all wireless devices are as much an extension of the home media experience as the wide-area experience
• most data-intensive applications are rather sedentary.

In particular, the increasing proportion of tablets will be kept exclusively or mainly at home as complementary media devices, largely replacing secondary TV sets, and will therefore be mostly Wi-Fi-only.

We estimate that the Wi-Fi:cellular usage ratio of handsets and mid-screen devices was just under two to one in 2012. It will be just under five to one in 2018.

Tablets and other mid-screen devices remain a small part of the mobile traffic mix, but a very rapidly expanding part of Wi-Fi and fixed Internet

Only about 30% of tablets sold worldwide have a mobile capability, and most tablets are sold outside operator retail channels. Many mobile-capable or mobile-enabled tablets are never used on mobile networks because that involves an incremental cost in addition to mobile capability.

Usage of tablets on mobile networks remains low. In developed markets, just 2.9% of mobile data traffic was generated by mid-screen devices in 2012. It is difficult for MNOs to use the subsidy model on tablets, because the value of the service element is low compared to handsets.

In developed markets, 92% of tablet traffic was over private Wi-Fi or fixed broadband in 2012 and a further 2% on public Wi-Fi. Most tablets will be used as secondary TV or media screens kept largely or exclusively in the home. A recent Ofcom survey highlighted the rapid substitution of secondary TVs with tablets in the UK. By the end of the forecast period, we expect that in a few of the most affluent countries, tablets will account for more than 50% of all fixed broadband Internet usage, and for an even higher proportion of total tablet traffic to be delivered over Wi-Fi.

Tablets will become the most important element in public Wi-Fi traffic. They are nomadic rather than mobile devices, requiring multiple static locations more than full mobility. In addition, accommodating large amounts of video in mobile data plans may be keeping users on Wi-Fi.

Nevertheless, MNOs have the opportunity to increase mobile data traffic on mid-screen devices, and we would expect greater use of multi-device plans to generate more revenue from traffic. Businesses substituting laptops with tablets will also drive mobile traffic.

As LTE data prices fall, the incremental cost of mobile connectivity may become more acceptable. However, the additional cost of a mobile-capable device is a greater impediment to mobile usage of tablets.

Definition of geographical regions

Developed markets
• North America
• Developed Asia–Pacific
• Western Europe
• Central and Eastern Europe

Emerging markets
• Latin America
• Emerging Asia–Pacific
• The Middle East and North Africa
• Sub-Saharan Africa

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