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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

Table Of Contents

Wireless network traffic worldwide: forecasts and analysis 2013-2018
Contents

7.Executive summary and key results of forecast
8.Our forecasts indicate that the CAGR of mobile data volume will be 46.1% worldwide for 2012-2017, and 43.6% for 2013-2018
9.Growth rates in mobile data traffic in most countries were lower in 2012 than in 2011
10.Major changes in our forecasts since 2012
11.The most meaningful analysis is based on the evolution of transport costs, not on the evolution of devices and usage
12.We forecast large variations between regions and, in general, lower mobile data traffic growth in developed markets
13.Some of the largest national variations in forecast growth rates stem from the established levels of usage in individual markets
14.The proportion of mobile data traffic that is generated by handsets will not increase dramatically at a worldwide level
15.By 2018, 19% of SIM-enabled devices will be 4G and these will generate 79% of traffic
16.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
17.Mobile data traffic will account for only about 5% of Internet data traffic by 2018

18.Drivers and inhibitors: capacity and cost side
19.Network- and customer-side factors determine mobile data traffic volumes
20.Capacity headroom on mobile networks grows in three ways
21.Pure spectral efficiency gains are likely to become more modest
22.Spectrum availability and bandwidth during the next 5 years
23.Capacity shortages are essentially local affairs, and the spectrum crisis is a myth
24.Small cells will increase capacity dramatically in the most congested cells, but the effect is diluted across whole countries
25.Small cells reduce the incremental cost of a gigabyte but the effect will probably be diluted unless operating costs can be reduced
26.Cellular network traffic will in general adapt to capacity growth, but there are demand-side complications

27.Drivers and inhibitors: demand side
28.Active SIMs in personal devices will outstrip the world population by 2016
29.Average 3G/4G handset usage will accelerate towards the end of the forecast period in developed markets
30.The fastest rates of growth in subscriber numbers tend to coincide with the greatest dilution in the growth of average usage
31.Mobile broadband usage shows diverging trends in the more-developed markets
32.The importance of USB modem and router data traffic is related to fixed broadband pricing and availability in emerging markets
33.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
34.Social factors affect mobile data usage levels

35.Wi-Fi and ‘offloading'
36.Geographical concentration of wireless traffic is creating a battleground between mobile operators' small cells and fixed operators' Wi-Fi
37.Wi-Fi ‘offload' is a misleading term
38.The proportion of traffic generated at home is higher for handset data than for voice
39.The cellular and Wi-Fi share of at-home and in-office handset data usage will vary greatly between regions
40.Public Wi-Fi is increasingly driven by fixed and cable operator strategy rather than by MNO offloading
41.Public Wi-Fi will take a slightly higher share of traffic and then plateau, and traffic will become skewed to larger-screen devices
42.In China, public Wi-Fi has developed in a unique way

43.Market definition
44.Data sources and methodology
45.Definition of geographical regions [1]
46.Definition of geographical regions [2]

47.About the author and Analysys Mason
48.About the author
49.About Analysys Mason
50.Research from Analysys Mason
51.Consulting from Analysys Mason



List of figures

Figure 1: Summary of report coverage
Figure 2: Mobile data traffic, developed and emerging markets, 2012-2017 (2012 forecast) and 2012-2018 (2013 forecast)
Figure 3: Growth in mobile data traffic, by region, 2011-2012
Figure 4: Growth in mobile data traffic, by country, 2010-2011 and 2011-2012
Figure 5: Mobile data traffic growth multiples, by region, 2013-2018
Figure 6: Mobile data traffic, by region, 2011-2018
Figure 7: Average monthly mobile data usage levels per head of population, 2012, and CAGR for mobile data, by country, 2012-2018
Figure 8: Mobile data traffic by device type, and handsets' share of traffic, worldwide, 2012-2018
Figure 9: Handsets' share of mobile data traffic, by region, 2011-2018
Figure 10: 4G devices' share of mobile data traffic, by region, 2011-2018
Figure 11: Proportion of devices that are 4G, and 4G devices' share of mobile data traffic, by region, 2018
Figure 12: Wireless data traffic generated by handsets and mid-screen devices, and proportion of traffic generated in a private location, worldwide, 2012-2018
Figure 13: Mobile data as proportion of Internet traffic, by region, 2011-2018
Figure 14: The three dimensions of mobile network capacity
Figure 15: Average spectral efficiency by technology
Figure 16: Typical spectrum refarming in Europe, 2013 and 2018
Figure 17: Bandwidth gain for a typical European country through new and refarmed spectrum, 2012-2018
Figure 18: Typical small-cell deployment, large European country, by geotype, 2018
Figure 19: Site and capacity multiples for a typical small-cell deployment in a large European country
Figure 20: Typical incremental cost per gigabyte for macrocells and small cells, developed market
Figure 21: Bandwidth growth multiples, typical developed markets, 2012-2018
Figure 22: Mobile connections, by type, worldwide, 2011-2018
Figure 23: Mobile connections, by device generation, worldwide, 2011-2018
Figure 24: Average monthly mobile data usage per 3G/4G handset, selected developed markets, 2012
Figure 25: Average monthly mobile data usage by handset technology generation, developed markets, 2012-2018
Figure 26: Illustrative mobile data usage and smartphone penetration rates
Figure 27: Illustrative average mobile data usage and year-on-year growth rates for usage and traffic
Figure 28: Average mobile broadband usage 2012, and rate of growth in average usage 2011-2012, Europe
Figure 29: Mid-screen devices' share of mobile data traffic, and mobile networks' share of mid-screen device traffic, developed markets, 2012-2018
Figure 30: Average hours not spent at work or travelling to work, and average monthly mobile data usage per head of population, 2012
Figure 31: Unique and competing or converging areas for fixed and mobile networks
Figure 32: Schematic view of types of Wi-Fi offload - not to scale
Figure 33: Proportion of handset wireless data traffic generated at home or place of work, by region, 2011-2018
Figure 34: Cellular networks' share of handset data traffic that is generated at home or place of work, by region, 2011-2018
Figure 35: Public wireless data traffic by network type, developed markets, 2011-2018
Figure 36: Public Wi-Fi traffic by device type, developed markets, 2011-2018
Figure 37: China Mobile's wireless data traffic by network type, 2010-2012
Figure 38: Public wireless data by network type, China, 2011-2018
Figure 39: Regional breakdown used in this report
Figure 40: Regional breakdown used in this report

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