Mobile internet traffic via handsets in the US:

Forecasts to 2015
Coda Research Consultancy

Coda. Coda Research Consultancy

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 Coda. Coda Research Consultancy

Mobile internet traffic via handsets in the

US: Forecasts to 2015

Steve Smith PhD

Research Director

Coda Research Consultancy

Released 29 March 2010

For more information about this product, please email steve.smith@codarc.co.uk, or call
+44 (0)7779 610004

European office:
Coda Research Consultancy Ltd
95 Wodeland Avenue
Guildford
Surrey
GU2 4LD
England

© Coda Research Consultancy Ltd, 2010

All rights reserved. No part of this work may be reproduced or transmitted in any form or by any means, or stored in any retrieval system of any
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and Patents Act 1988 or the Copyright and Rights in Databases Regulations 1999.

This report draws upon research and analysis conducted by Coda Research Consultancy. Use of this report by any third party for whatever
purpose should not, and does not, absolve such third party from using due diligence in verifying the report’s contents. Any use which a third party
makes of this document, or any reliance on it, or decisions to be made based on it, are the responsibility of such third party. Coda Research
Consultancy, its affiliates and representatives accept no duty of care or liability of any kind whatsoever to any such third party, and no
responsibility for damages, if any, suffered by any third party as a result of decisions made, or not made, or actions taken, or not taken, based on
this document. Coda Research Consultancy does not make investment recommendations, in this report or otherwise, and nothing in this report
should be interpreted as an opinion by Coda Research Consultancy either on market forecasts or on the prospects of specific companies.

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Introduction and contents

Document at a glance:
Type – US market and behavioral assessment, with forecasts to 2015
Printed page length – 30
Figures – 25
Number of forecasts – 14

We forecast that mobile handset data traffic will rise at +117% CAGR, to reach 327PB per month in
2015. This report provides our forecasts for mobile internet data traffic via mobile handsets up to
2015, separated by feature phones and smartphones. It includes forecasts for video traffic via
handsets and data traffic per handset and per smartphone subscriber.

A discussion regarding impacts of the expansion of mobile traffic upon carriers is given, alongside data
for carrier performance, 4G roll out across carriers, and drivers to traffic growth.

This report is essential reading for mobile carriers, consultants, financial analysts, application, content
and service providers, and anyone else with an interest in the future of the mobile internet.

Contents, and tables of figures and forecasts

Contents Carrier performance ............................................... 21

Methodology...........................................................5
Drivers to traffic growth.........................................6
Why smartphones are important............................... 6
Smartphone subscriber forecast to 2015 ................... 6
3G+ handset subscriber forecast to 2015 .................. 8
Mobile internet user forecasts................................... 8
Mobile internet user forecast to 2015................. 9
Mobile internet users via smartphones forecast to
2015 .......................................................... 9
Mobile internet users by smartphone brand........ 9
Mobile internet users via feature phones forecast
to 2015 .....................................................10
Mobile video users and traffic via handsets, to
2015 ................................................................11
Social networking ...................................................11
Use of mobile handsets for social networking ....11
Social networking user forecast to 2015 ............12
4G rollout...............................................................13
LTE: An inevitable driver to traffic growth .........13
Sprint..............................................................14
Verizon ...........................................................14
T-Mobile..........................................................15
AT&T ..............................................................15
Data traffic forecasts............................................17
All handset data traffic, to 2015...............................17
Data traffic: smartphones vs feature phones, to
2015 ................................................................17
Data traffic per handset subscriber, to 2015 .............18
Data traffic per smartphone subscriber, to 2015 .......18
Impacts of mobile internet traffic upon carriers ..20
Carrier capacity ......................................................20
Signaling ................................................................20
Peak carrier capacity and impacts of smartphone
usage....................................................... 21
Carrier speeds and reliability............................ 22
Flat rate pricing ..................................................... 23
Tiered pricing ........................................................ 24
How will tiered pricing affect the average user? 25
Tiered pricing – indicative of revenues shifting
away from carriers.................................... 25
4G rollout..............................................................26
LTE: An inevitable driver to traffic growth ............... 26
Sprint.................................................................... 27
Verizon.................................................................. 27
T-Mobile................................................................ 28
AT&T .................................................................... 28
Sources used to compile our forecasts .................29
About Coda Research Consultancy .......................30
Forecasts
Forecast 1. Smartphone subscribers, 2009-2015............. 7
Forecast 2. Smartphone subscribers as share of all
mobile handset subscribers, 2009-2015 ................. 7
Forecast 3. 3G+ mobile handset subscribers, 2009-
2015 ................................................................... 8
Forecast 4. Mobile internet users via mobile handsets,
2009-2015 ........................................................... 9
Forecast 5. Mobile internet users via smartphones,
2009-2015 ........................................................... 9
Forecast 6. Mobile internet users via feature phones,
2009-2015 ......................................................... 10
Forecast 7. Handset traffic by traffic type, 2009-2015... 11

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Forecast 8. People accessing social networking.
Smartphones vs feature phones, 2009-2015 .........12
Forecast 9. Mobile social networking users as % of
mobile subscribers. Feature phone vs
smartphone users, 2009-2015 .............................13
Forecast 10. Handset data traffic per month, 2009-
2015 ..................................................................17
Forecast 11. Smartphone data traffic vs feature phone
traffic, 2009-2015 ...............................................17
Forecast 12. Smartphone vs feature phone % data
traffic split, 2009-2015 ........................................18
Forecast 13. Data traffic per mobile handset
subscriber, 2009-2015.........................................18
Forecast 14. Smartphone data traffic per subscriber,
2009-2015..........................................................19

Figures
Figure 1. Mobile internet user penetration across
smartphone brands .............................................10
Figure 2. Social networking users accessing Facebook,
MySpace and Twitter, 2009 vs 2010.....................12
Figure 3. Typical throughout speeds, comparing 3G
with LTE.............................................................13
Figure 4. Sprint WiMax coverage map by city ................15
Figure 5. Smartphone OS penetration vs OS traffic
share..................................................................19
Figure 6. Impact of smartphone penetration on
network utilization...............................................21
Figure 7. Selected cities with low mobile internet
carrier reliability via smartphones.........................22
Figure 8. Mobile internet reliability by carrier.................22
Figure 9. Average upload and download carrier
speeds via smartphones ......................................23
Figure 10. Typical throughout speeds, comparing 3G
with LTE.............................................................26
Figure 11. Sprint WiMax coverage map by city ..............27

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Methodology

Overview
This report draws from primary and secondary research. Sources are identified where secondary data
has been employed. Forecasts have been developed using a variety of statistical methods and models
and where possible have been compared with forecasts from other organizations.

Mobile data traffic includes, among others, Wi-Fi, 2G, 3G and 4G, video service traffic, social
networking and location based service traffic, SMS and MMS.

Variables used to determine forecasts include (data for some of these are included in the
report):
 3G+ handset shipment and penetration forecasts
 Smartphone and mobile phone penetration forecasts
 Mobile internet user forecasts via feature phones and smartphones
 Mobile internet and mobile Wi-Fi usage (in-home and hotspots), including frequency of usage
and types of services accessed
 Connection speeds and prices
 Mobile applications and content services including:
o Mobile video users across services, including paid subscription and web based services
o Mobile location based services and social networking
o Mobile payments and mobile banking
o Mobile internet browsing
 US demographic changes
 Consumer typologies
 Household typologies
 Economic indices
 Base figures provided by data supplied privately by Cisco, and by Gartner, IDC, Nielsen,
comScore, Informa Telecoms and Media, and the ITU

Each of the above informs the following procedure:

Calculate number of connections by type and by speed

Calculate adoption rates for different services and applications (e.g. Video, social networking, mobile
payments, and location based services)

Multiplied by
Estimates of the number of usage minutes and kilobytes per minute for each application and service

To generate
Traffic per annum

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About Coda Research Consultancy

Coda Research Consultancy specializes in providing critical insight into market developments and
behavior around new media, technologies and services in order to help IT and media professionals,
business executives, and investors make fact-based decisions around strategy, service provision and
product development.

Coda employs a variety of rigorous quantitative and qualitative research procedures. It draws upon a
range of disciplines, and collaborates with top commercial and academic organizations.

Coda Research Consultancy is led by Dr Steve Smith, an internationally acknowledged research

specialist with extensive experience consulting for media and technology companies.

To find out more, visit www.codarc.co.uk, or contact us below:

European office
95 Wodeland Avenue
Guildford
Surrey
GU2 4LD
England
Tel: +44(0)7779 610004
Email: steve.smith@codarc.co.uk

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