Already a Bloomberg.com user?
Sign in with the same account.
Regardless of which platform is winning today’s smartphone race, the installed base of active iPhones remains huge, and according to a new report from mobile infrastructure maker Ericsson, those iOS devices are having an outsize impact on the world’s 3G networks.
Traffic originating from the iPhone is nearing 50 percent of all data traversing carriers’ HSPA networks. Those numbers could have a chilling effect on emerging LTE operators, which are trying to migrate to 4G but are finding themselves contending with the iPhone’s enormous 3G demands.
For its Traffic and Market Report, Ericsson sampled data from GSM carriers in the Americas, Europe, and Asia, discovering that, on average, the iPhone accounts for a little more than 20 percent of their total subscribers but a whopping 45 percent of their total 3G/HSPA traffic. In comparison, Android penetration levels among those same operators are around 15 percent, while those devices account for about 30 percent of their 3G traffic loads.
Ericsson found that, on average, iPhone and Android ran neck and neck when it came to average consumption per subscriber: around 350 MB per month. But there was huge variation in those usage levels among different carriers, especially on Android. At the high end of Ericsson’s measurements, Android users consume 1,400 MB per month, compared with 1,200 MB for the iPhone, while on some networks Android phone usage averaged a mere 50 MB per month. Network monthly averages for the iPhone never drop much lower than 200 MB.
The overall variation can be explained by carriers’ widely differing pricing policies. For instance, T-Mobile USA not only offers fairly liberal data buckets in its data tiers but also allows customers to use mobile hotspot capabilities at no extra charge, driving up monthly consumption. Ericsson explained the even bigger variation among Google OS phones, however, by the fact that Android devices run the entire gamut of the market, while Apple targets the middle to high end. So in networks where Android plays second fiddle to the iPhone—which for a long while was the case at AT&T—Android devices often gravitate toward the low end, while Apple devices wind up in the hands of power users.
That helps explain how the iPhone can have such an enormous impact on operators’ 3G networks. IPhones are not only a plurality of all devices on the network but are also often wielded by the carriers’ most-aggressive data users.
Ericsson’s data take only HSPA networks into account. CDMA operators such as Sprint and Verizon only recently landed the iPhone, so they have spent the past several years loading up their 3G networks with Android devices. Android also is the only smartphone OS, besides Windows Phone, supported on an LTE network. Compared with 3G, the installed LTE phone base is miniscule, but it’s growing rapidly.
If Apple doesn’t include LTE in this year’s iPhone, the gap between Android and iOS on 3G traffic levels may only grow bigger. Android power users will start migrating to new LTE networks, while iPhone users will remain on much more inefficient 3G networks.
How would moving to LTE affect you? As I have written before, a 3G-only iPhone scenario could play havoc with the wireless industry, particular in North America. If operators must keep investing in their 3G networks in order to meet mounting iPhone traffic, they won’t be able to focus on their future LTE networks, which will ultimately allow them to deliver a lot more data a lot more cheaply.
Apple has signaled it’s ready to embrace LTE with the launch of the new iPad, hopefully securing 4G’s place in at least some versions of the new iPhone. LTE may sound like a carrier conceit—promising little to consumers except higher speeds and crappier battery life—but consumers stand to lose out as well if the transition to LTE is delayed. LTE is the first stepping stone to much-higher-capacity LTE Advanced systems.
By dramatically lowering the cost to deliver data, carriers will start lowering the data prices they offer consumers. They won’t do it out of the goodness of their hearts, but that’s where competition comes into play.
Also from GigaOM:
LTE Advanced: What It Is and Isn’t, and Why That Matters (subscription required)