Analysys Mason - Consumer Smartphone Usage 2014 Mobile Data Usage

Consumer smartphone usage 2014: mobile data usage
Research Report
Consumer smartphone usage 2014: mobile data

usage
April 2015
Martin Scott and Aris Xylouris
© Analysys Mason Limited 2015

Consumer smartphone usage 2014: mobile data usage 2
About this report
 This report analyses the smartphone usage of consumers in

France, Germany, the UK and the USA in 3Q and 4Q 2013. Who needs to read this report:
The analysis is based on data provided by Nielsen, using an  Strategy, finance and marketing executives, and directors
app developed by Arbitron Mobile. and managers within mobile operators, because the
monetisation of mobile data requires an understanding of
 This event-level data allows us to produce an in-depth
how consumers use it.
analysis of information including foreground app usage (‘face
time’), data traffic (cellular and Wi-Fi), location (home, away  Vendors and executives in operators’ CTO offices who are
and travelling), as well as voice and SMS usage. responsible for network dimensioning, because this report
provides data on where and why cellular and Wi-Fi traffic
 This report presents the findings from our research that is generated.
relates to the use of handset data services. Specifically, it
 Industry experts, because it provides real-world data about
presents information about:
how consumers use their handsets, which is more reliable
 changes in data usage on handsets and the apps that than self-reported primary research.
drive data consumption
 the role that device capabilities such as screen size and Key questions answered in this report:
LTE support play in affecting handset data usage
 What is driving mobile data usage and what role do apps
 the changing role of Wi-Fi and the types of hotspot to and device specifications have to play in that?
which consumers connect their smartphone  How does LTE change mobile data usage and what is
 the demographic trends associated with changes in usage. changing?
 How is Wi-Fi used on handsets and is there evidence of
cellular substitution?
 How successful have operator and community Wi-Fi
strategies been?

Contents
Slide no. Slide no.
6. Executive summary 19. The relationship between the size of the device and the amount of
7. Executive summary: 81% of handset data generated on smartphones in cellular and Wi-Fi data that it generates is strong and clear
our panel was carried over Wi-Fi 20. LTE users used their devices for 63% longer per day than average and
8. Executive summary: Online video accounts for most handset data generated 2.7 times as much cellular data traffic as non-LTE users
usage, and LTE and high-specification devices will encourage greater 21. Online video accounts for most handset data usage, but gaming and
use messaging have relatively low data rates despite high usage
9. Recommendations 22. Operators have ‘zero rated’ many categories of app and this could be
10. Recommendations applied to other categories
11. Changes in handset data usage 23. Drivers of change: the role of Wi-Fi
12. Mobile data is the main engine of revenue growth for Western operators 24. The role of Wi-Fi directly affects the monetisation of cellular data
and understanding how handset data use is changing is vital services
13. LTE take-up in the USA will reach 58% by the end of 2015 25. Most smartphone Wi-Fi traffic was generated in the home
14. Handset data traffic is, and will continue to be, predominantly carried 26. The use of Wi-Fi in public locations is particularly developed in the UK
over Wi-Fi with strong community Wi-Fi and high Wi-Fi use in retail establishments
15. Most handset data usage is on Wi-Fi so operators must adjust cellular 27. Demographic analysis of data use
data pricing 28. The early majority demographic profile of ‘young users consume more
16. The price and monthly allowance constraints of cellular data potentially cellular data’ may be being disrupted
inhibit cellular data usage from being used in the same way as Wi-Fi 29. There is an untapped demographic of 4G-capable handset users that
17. Drivers of change: LTE and device capabilities are strong potential targets for upselling 4G services
18. LTE users in the USA had similar Wi-Fi usage profiles to non-LTE 30. There is not a significant correlation between Wi-Fi and cellular data
users, but their cellular data usage was effectively three times higher distribution, and demographics do not appear to play a significant role

Contents
Slide no.
31. Methodology and definitions

32. Methodology and definitions [1]
33. Methodology and definitions [2]
34. About the authors and Analysys Mason
35. About the authors
36. About Analysys Mason
37. Research from Analysys Mason
38. Consulting from Analysys Mason

List of figures
Figure 1: Distribution of total smartphone traffic across all panellists Figure 15: Data traffic by app category and network type
Figure 2: App sub-categories by average percentage of time and average Figure 16: Illustration of access technologies used for mobile data and voice
percentage of data traffic coverage in an ‘inside-out’ MNO model
Figure 3: Mobile data as a percentage of service revenue for residential Figure 17: Percentage of panellists that connected to Wi-Fi, by hotspot
customers, by country or region, 2010–2019 category, and the average amount of their Wi-Fi data usage
Figure 4: Percentage of panel that had an LTE-capable handset and that attributable to that category, Android users
used LTE Figure 18: Percentage of respondents who connected to Wi-Fi, by hotspot
Figure 5: LTE-capable handsets as a percentage of all handsets, by category and country
country or region, 2010–2019 Figure 19: Monthly cellular data usage by age group, 2011 and 2013
Figure 6: Distribution of total smartphone traffic across all panellists Figure 20: Monthly cellular and Wi-Fi data usage by country and subscription
Figure 7: Distribution of smartphone panellists, by type of data connectivity type
Figure 8: Distribution of total average monthly smartphone cellular data Figure 21: Percentage of panellists who use 4G services, by gender and age
traffic, by percentile group
Figure 9: Distribution of total average monthly smartphone Wi-Fi traffic, by Figure 22: Percentage of panellists who own a 4G-capable handset but did
percentile not use 4G services, by gender and age group
Figure 10: Average monthly data usage for customers who did and did not Figure 23: Distribution of panellists by Wi-Fi and cellular data percentile
use LTE, by network type, USA Figure 24: Panellists’ gender, by country of observation
Figure 11: Median data usage by network type and smartphone screen size Figure 25: Panellists’ age, by country of observation
Figure 12: Average MoU by app category for panellists Figure 26: Panellists’ handset OS, by country of observation
Figure 13: Top-ten apps by handset traffic
Figure 14: App sub-categories by average percentage of time and average
percentage of data traffic

Executive summary
Recommendations
Changes in handset data use
Drivers of change: LTE and device capabilities
Drivers of change: the role of Wi-Fi
Demographic analysis of data use
Methodology and definitions
About the authors and Analysys Mason

Executive summary: 81% of handset data generated on smartphones in

our panel was carried over Wi-Fi
 This report analyses the real-world handset data usage Figure 1: Distribution of total smartphone traffic across all panellists (n =
patterns of consumers in France, Germany, the UK and the 1588) [Source: Analysys Mason and Nielsen, 2015]
USA. Deep analysis of mobile data usage is important
because mobile data is now the main engine of revenue
growth for operators in developed markets.
 19% of all smartphone traffic observed in the panel was
carried over the cellular network. LTE will make cellular of total smartphone traffic
of total smartphone traffic
networks more attractive relative to Wi-Fi, but we still expect was carried over the
was carried over Wi-Fi
the proportion of total smartphone traffic carried over the cellular data network
cellular network to decline to 16% by 2019. The volume of
data will grow significantly on both types of network. Average cellular data Average Wi-Fi traffic
traffic per month per month
 LTE will not be sufficient to keep consumer traffic in Western (mean/median) (mean/median)
markets on cellular networks rather than Wi-Fi. The
percentage of panellists that used Wi-Fi on their smartphone All smartphones
increased from 75% in 2011 to 97% in 2013, exceeding the
percentage of panellists that used cellular data (92%).
 Until the pricing of cellular data is further adjusted and
addressed, the relative importance of Wi-Fi will not decrease Prepaid
significantly. Customers’ perception of value for money is
based on price per gigabyte, but is also framed by their
allowance (and its place within a pricing structure) and the
approach taken by the operator to overage (that is, charging Contract
for out-of-bundle usage).

Executive summary: Online video accounts for most handset data usage,
and LTE and high-specification devices will encourage greater use
Online video accounts for most of handset data usage Figure 2: App sub-categories by average percentage of time and average
percentage of data traffic (n = 1588) [Source: Analysys Mason and Nielsen,
 Panellists in all countries consumed an average of 1.1GB of 2015]
cellular and 4.5GB of Wi-Fi data per month. This figure is 20%
skewed by a minority of heavy users. Online video1
 Many apps are driving this data usage, but Facebook, built-in
Average percentage of all traffic

web browsers and YouTube are among the main ones. Browsing
Other
15%
 Online video is the most data-hungry category, responsible infotainment
for 19% of all traffic that we were able to assign to an app,
but accounted for only 3% of all face time. YouTube, in
particular, generated an average of 190MB of data for every Social
10% Gaming
hour that the app was in the foreground of the device. networking
Other
LTE will drive further changes in app and data usage multimedia
Messaging
Other utilities
 Services and devices affect app engagement and data Application
5% stores
usage. Attempting to isolate the effect of using higher- Telephony
specification LTE-capable devices from the effect of actually
using LTE reveals several notable trends.
LBS2 PIM3
 LTE users used their device for 63% longer than non-LTE 0%
users. 0% 5% 10% 15% 20%
 At the app level, high-specification devices were used Average percentage of time
more than the average (58% longer for gaming, 30% for 1 The online video category includes only apps whose primary purpose is to watch videos. The
browser is categorised elsewhere.
browsing), but LTE devices had even greater engagement
2 LBS = Location-based services.
(98% longer for gaming, 81% for browsing). 3 PIM = Personal information management.

Executive summary
Recommendations

Recommendations
 Operators could combine Wi-Fi and LTE propositions to either prolong the opportunity to charge a premium for LTE or to
enhance the LTE proposition. The opportunity to charge a premium for LTE is rapidly diminishing in markets that have had the
technology for more than 18 months. Wi-Fi still has a potential role to play as part of a mobile or converged operator’s strategy –
unlimited Wi-Fi access could be bundled only with LTE tariffs, or LTE customers could be granted a higher-speed channel on
community or operator Wi-Fi hotspots.
 LTE does not solve long-term revenue growth problems. Much comes down to operators’ ability to fine-tune tariff structures,
balance right-sizing efforts and overage charges, and offer the right level of handset subsidies. These tactical concerns have the
most direct impact on the bottom line.
 MNOs do not necessarily want to offer Wi-Fi, but they must. Wireless data traffic statistics show that the opportunity for public
Wi-Fi is modest and limited. Furthermore, MNOs that deploy Wi-Fi run a small risk of cannibalising their mobile data revenue.
However, public Wi-Fi offers benefits for operators, such as service differentiation (compared with competitors without Wi-Fi) and
increased customer retention. In fact, consumer behaviour studies have shown that people like using Wi-Fi and prefer it to using
mobile data in some cases. Public Wi-Fi can effectively supplement mobile capacity when implemented adequately – particularly in
dense urban areas, such as business districts and shopping areas.

Executive summary
Recommendations
Changes in handset data usage

Mobile data is the main engine of revenue growth for Western operators
and understanding how handset data use is changing is vital
 This report analyses the real-world handset data usage Figure 3: Mobile data as a percentage of service revenue for residential
patterns of consumers in the France, Germany, the UK and customers, by country or region, 2010–2019 [Source: Analysys Mason, 2015]1
the USA. Deep analysis of mobile data usage is important for 70%
the following three reasons.
60%
 Mobile data is the main engine of revenue growth for
Percentage of revenue
Western operators: Mobile data accounts for a larger 50%
proportion of consumer service revenue than voice and
messaging combined in the USA and this will happen for 40%
the first time in Western Europe in 2015.
30%
 Wi-Fi accounts for most data traffic and is difficult to
monetise: 19% of all smartphone traffic observed in the 20%
panel was carried over the cellular network and 81% was
carried over Wi-Fi. The potential roles that Wi-Fi can play 10%
have changed with the advent of heterogeneous networks
and public and community Wi-Fi initiatives. 0%
2010
2011
2012
2013
2014
2015
2016
2017
2018
2019
 Owners of LTE devices use their handsets for much
longer per day and generate more data: The use of LTE
may moderate the use of Wi-Fi in some situations – our France Germany
research indicates that LTE users, on average, generate
UK USA
significantly (2.7 times) more data than non-LTE users and
use their handsets for 63% longer. Western Europe
1 See Analysys Mason’s Western Europe telecoms market: interim forecast update (16 countries)
2014–2019, available at www.analysysmason.com/WE-Dec2014 and Global telecoms market:
interim forecast update 2014–2019, available at www.analysysmason.com/GTF2015. Note that
the figure for the USA is for the total market, rather than solely for residential customers,
because comparable data was not available.

LTE take-up in the USA will reach 58% by the end of 2015
 The change in usage behaviour on LTE will rapidly become a Figure 5: LTE-capable handsets as a percentage of all handsets, by country
mass-market phenomenon. We expect 58% of panellists in or region, 2010–2019 [Source: Analysys Mason, 2015]1
the USA and 44% of those in the UK to be actually using an 90%
LTE service by the end of 2015.
80%
 The fieldwork for this research was conducted in late 2013
Percentage of handsets
and therefore the take-up of LTE-connected devices was low 70%
at the time of observation – particularly in Europe – so we 60%
have focused on the impact of LTE handsets and services
among panellists in the USA. 50%
 Even at this early stage in LTE development, the penetration 40%
of LTE-capable handsets in the USA was high, as was the
30%
percentage of panellists that used LTE. A significant
proportion of LTE-capable handsets in Europe were not yet 20%
being used on an LTE network at the time of analysis.
10%
Figure 4: Percentage of panel that had an LTE-capable handset and that
used LTE (n = 1588) [Source: Analysys Mason and Nielsen, 2015] 0%
2010
2011
2012
2013
2014
2015
2016
2017
2018
2019
Country Percentage of panel that had Percentage of panel
an LTE-capable handset that used LTE
France 20% 4% France Germany

Germany
UK USA
14% 3%
Western Europe
UK 21% 3%
1 See Analysys Mason’s Western Europe telecoms market: interim forecast update (16 countries)
USA 60% 48% 2014–2019, available at www.analysysmason.com/WE-Dec2014 and Global telecoms market:
interim forecast update 2014–2019, available at www.analysysmason.com/GTF2015.

Handset data traffic is, and will continue to be, predominantly carried over
Wi-Fi
 19% of all smartphone traffic observed in the panel was Figure 6: Distribution of total smartphone traffic across all panellists
carried over the cellular network. LTE will make cellular (n = 1588) [Source: Analysys Mason and Nielsen, 2015]
networks more attractive relative to Wi-Fi, but we still expect
the proportion of total smartphone traffic carried over the
cellular network to decline to 16% by 2019. The volume of
data will grow significantly on both types of network.1
 This is not necessarily bad news for operators. The price of of total smartphone traffic
of total smartphone traffic
provisioning 1GB of data on fixed network infrastructure is was carried over the
was carried over Wi-Fi
significantly lower than that of the cellular network and for cellular data network
operators with limited spectrum capacity, or for MVNOs,
Wi-Fi presents an option to pursue an ‘inside-out’ business Average cellular data Average Wi-Fi traffic
model, or at least to control costs and maintain QoE. traffic per month per month
(mean/median) (mean/median)
 The pricing of cellular data steers usage levels, to some
extent. This leads to a greater variation in cellular data usage All smartphones
than for Wi-Fi (where prices are effectively flat). An ‘average’
user (as defined by mean values) used four times as much
cellular data as a ‘typical’ (as defined by median values).
Figure 6 highlights the continued disparity between heavy Prepaid
users of both the cellular and Wi-Fi networks and a ‘typical’
user and the distribution of data usage is provided in further
detail on slide 16.
Contract
1 For more information, see Analysys Mason’s Wireless network traffic worldwide: forecasts
and analysis 2014–2019. Available at www.analysysmason.com/WNTF-2014.

Most handset data usage is on Wi-Fi so operators must adjust cellular

data pricing
Figure 7: Distribution of smartphone panellists, by type of data connectivity  LTE will not be sufficient to keep consumer traffic in Western
(n = 1007 for 2011, 1596 for 2013) [Source: Analysys Mason and Nielsen, 2015] markets on cellular networks rather than Wi-Fi. The
percentage of panellists that used Wi-Fi on their smartphone
2011 Smartphone users
who did not use data
increased from 75% in 2011 to 97% in 2013, exceeding the
(7%) percentage of panellists that used cellular data (92%). This is
at least partially driven by:
Smartphone users  simplification and improvement in Wi-Fi authentication

who use both cellular from a user interface point of view (further improvements
and Wi-Fi (64%)
to password-less authentication will increase this effect)
Cellular only  the relative superiority of the quality of experience of Wi-Fi
(18%)
Wi-Fi only compared with cellular data in non-LTE areas (this will be
(11%) mitigated by further roll-out of LTE infrastructure)
 continued consumer apprehension of the price of cellular
2013 data, combined with operator pricing approaches.
 Until the pricing of cellular data is further adjusted and
Smartphone users addressed, the relative importance of Wi-Fi will not decrease
who did not use data
(1%)
significantly. Customers’ perception of value for money is not
Smartphone users who simply based on price per gigabyte but is also framed by their
Wi-Fi only use both cellular and Wi-Fi allowance (and its place within a pricing structure) and the
(7%) (90%)
approach taken by the operator to overage.1
Cellular
only (2%)
1 For further information, see Analysys Mason’s The Connected Consumer Survey 2015:
mobile customer retention. Available at www.analysysmason.com/CCS2015-mobile.

The price and monthly allowance constraints of cellular data potentially

inhibit cellular data usage from being used in the same way as Wi-Fi
Figure 8: Distribution of total average monthly smartphone cellular data  The difference between the distribution of cellular and Wi-Fi
traffic, by percentile (n = 1596) [Source: Analysys Mason and Nielsen, 2015] data usage potentially indicates that price and data
100000 allowances are inhibitors of cellular data usage.
Median usage Mean usage
= 283MB = 1.07GB  Wi-Fi data is essentially unconstrained by price because
(MB per month)
10000
Data usage
most panellists have unlimited Wi-Fi Internet access. Wi-Fi

1000 and cellular data are also constrained by location, so this
only serves as a first-order estimate, but we believe that if
100 cellular data usage were not constrained by pricing and
10
data caps then it logically follows that the distribution of
cellular data usage may be similar to that of Wi-Fi.
40%
70%
10%
20%
30%
50%
60%
80%
90%
100%
0%
 If cellular data were unconstrained, two things would

Percentile happen: average usage would increase; and the variance
Figure 9: Distribution of total average monthly smartphone Wi-Fi traffic, by in usage between users would fall. In the latter case,
percentile (n = 1596) [Source: Analysys Mason and Nielsen, 2015] cellular data might have a similar distribution curve to
100000 Wi-Fi. This would lead to a 23% increase in cellular data
Median usage Mean usage consumption, just from low-end customers using more
(MB per month)
10000 = 1.6GB = 4.5GB data. The mean usage would also increase.
Data usage
1000  The highest-usage consumers in our panel had a

significant impact on the average usage of the panel. The
100 top percentile of users consumed more than 11GB of
cellular data per user per month and more than 40GB of
10
Wi-Fi per user per month. The percentage of cellular data
80%
10%
20%
30%
40%
50%
60%
70%
90%
100%
0%
users that exceed these numbers will have increased

significantly since this data was collected.
Percentile

Executive summary
Recommendations

LTE users in the USA had similar Wi-Fi usage profiles to non-LTE users,
but their cellular data usage was effectively three times higher
 A comparison of cellular and Wi-Fi data usage between Figure 10: Average monthly data usage for customers who did and did not
panellists that used and did not use LTE revealed that the use LTE, by network type, USA (n = 1596) [Source: Analysys Mason and
Nielsen, 2015]
use of LTE appears to have relatively little substitutive effect
on Wi-Fi usage in absolute terms. However, LTE users use
4.0
more cellular data as a proportion of their total data traffic
than non-LTE users.
3.5
 Average Wi-Fi usage among panellists in the USA was
Average data usage (GB per month)

relatively stable – 2.9GB per user per month for those who
did not use LTE and 2.8GB for panellists who used LTE. 3.0
 LTE customers were dependent on 2G and 3G for almost
one fifth of their cellular data because of limitations in 2.5
terms of geographical and, possibly, in-building coverage. Wi-Fi
LTE is being rolled out at lower frequencies (such as 2.0 LTE
800MHz) in countries other than the USA, which will help
with coverage obligations and in-building coverage. 2G/3G
1.5
 LTE users generated 2.7 times as much cellular data traffic
overall as non-LTE users. Some of this increase in data
usage is attributable to the device and some to the 1.0
improvement in network experience brought about by LTE.
0.5
0.0
Did not use LTE Used LTE

The relationship between the size of the device and the amount of cellular
and Wi-Fi data that it generates is strong and clear
 There is a relationship between the size of a device and the Figure 11: Median data usage by network type and smartphone screen size
amount of data traffic that it generates. (n = 1588) [Source: Analysys Mason and Nielsen, 2015]
 Average app usage (minutes) was twice as high for 3.5 More
large devices in the panel as for smaller devices and than 5
more minutes lead directly to greater data usage.
3.0
Median data usage (GB per month)

 The quality of video displayed on the device.
Dedicated online video apps accounted for 30% of cellular
data traffic among panellists in the UK. 2.5
 Other device specifications that correlate with screen

2.0
size. We identified that devices with a processor-speed-
multiplied-by-number-of-cores factor of more than 6.0 4 More than
consumed at least three times as much cellular data traffic 1.5 3.5 to less 4, up to 5
as lower-speed devices. than 4
 The relationship between LTE capabilities and data usage is 1.0
also important. Panellists in the USA (the largest group in
Less
terms of LTE take-up) who used LTE generated 2.7 times as
0.5 than 3.5
much cellular data as those who did not use LTE. We
compared this result to panellists who had an LTE-capable
handset but did not actually use LTE and found that they had 0.0
a cellular data usage level that was mid-way between that of 2.5 3 3.5 4 4.5 5 5.5 6
non-LTE and LTE users. This suggests that the increase in
cellular data usage for LTE users can be partly attributed to Screen size (inches)
LTE connectivity and partly to the underlying improvement in
Cellular Wi-Fi
the device specifications that then improved the user QoE.

LTE users used their devices for 63% longer per day than average and
generated 2.7 times as much cellular data traffic as non-LTE users
Figure 12: Average MoU by app category for panellists (n = 1588) [Source:  LTE users generated 2.7 times as much cellular data traffic
Analysys Mason and Nielsen, 2015]1 as non-LTE users in our panel. This increase in usage can be
attributed to three factors.
Use LTE
 Early adopters of new technologies (handsets and
services) are likely to use more data and be high-spending
UseUse
high-specification individuals.
HS devices
devices
 Device specification, particularly screen size and processor
All power, affects how it is used and data consumption.
 The LTE network provides a superior experience and
Do not use LTE enables people to consume more data.
 Isolating those three factors is complex. Figure 12 gives an
0 50 100 150 200 250 300 indication of their relative impact. It shows the average
Average MoU per day minutes of use per day by app category for handsets that
were connected to an LTE network as well as those handsets
Browsing Gaming that were high-specification but not necessarily connected to
Social networking Other entertainment LTE.
Maps and transport Communication  LTE users used their device for 63% longer, on average,
Multimedia PIM than non-LTE users in the panel, compared to 34% longer
Other utilities and commerce Locket for high-specification devices that might not have LTE.
Uncategorised  At the app level, high-specification devices led to some
1 We have explicitly broken out the minutes of usage for the app Locket because its usage was increase in use (58% increase in gaming compared to the
so high. This app places advertisements on the home screen of people’s handsets in
exchange for rewards and app credits. A number of LTE users in our panel used this app
average, 30% in browsing), but not as much as LTE use
heavily, which is why we have highlighted its effect explicitly in the chart. (98% for gaming, 81% for browsing).

Online video accounts for most handset data usage, but gaming and
messaging have relatively low data rates despite high usage
 Panellists in all countries consumed an average of 1.1GB of Figure 14: App sub-categories by average percentage of time and average
cellular and 4.5GB of Wi-Fi data per person per month. percentage of data traffic (n = 1588) [Source: Analysys Mason and Nielsen,
2015]
These figures are skewed by a minority of heavy users.
20%
 Many apps drove this data usage, but the main ones included Online video1
panellists’ built-in web browsers, Facebook and YouTube.
Average percentage of all traffic

 Online video is the most data-hungry application category, Browsing
responsible for 19% of all traffic that we were able to assign to Other
15%
infotainment
an app, but accounted for only 3% of all face time.1 YouTube
generated an average of 190MB of data for every hour that
the app was in the foreground of the device.
10% Social
Figure 13: Top-ten apps by handset traffic (n = 1588) [Source: Analysys networking Gaming
Mason and Nielsen, 2015] Other
multimedia
MB per Percentage Percentage Messaging
Rank App hour of all time of all traffic Other utilities
Application
1 YouTube 190 1.8% 14% 5% stores
Telephony
2 Browser 42 7.6% 13%
3 Facebook 24 7.3% 7%
LBS PIM
4 AppTrailers 193 0.8% 6%
5 Application stores 98 1.0% 4% 0%
6 SMS/MMS, iMessage 7 7.4% 2% 0% 5% 10% 15% 20%
7 Chrome 37 1.3% 2% Average percentage of time
8 Video player 97 0.5% 2%
9 Netflix 137 0.3% 2% 1 The online video category includes only apps whose primary purpose is to watch videos. The
10 Email 24 1.5% 1% browser is also used to consume videos, and is categorised elsewhere.

Operators have ‘zero rated’ many categories of app and this could be
applied to other categories
 The app categories that drive cellular and Wi-Fi handset data Figure 15: Data traffic by app category and network type (n = 1588) [Source:
traffic are similar. Online video is notable in both cellular and Analysys Mason and Nielsen, 2015]
Wi-Fi-connected settings. MNOs such as EE in the UK have Percentage of traffic
said that online video will be the ‘killer app’ for LTE. Our data App category
Cellular Wi-Fi
supports this to some extent – smartphone users are
acclimatising to mobile video and discovering use cases. Online video 18% 19%
 The apps that are typically offered ‘zero rated’ with lower-end Browsing 18% 17%
tariffs (that is, where data related to that app is not charged) Social networking 12% 10%
have included social networking in Western markets and OTT Gaming 10% 8%
messaging apps in emerging markets. These app categories
are those for which the percentage of time using the app has Other infotainment 9% 15%
historically outstripped the percentage of total data traffic that Other multimedia 7% 7%
the app generates. Many social networking apps now Messaging 8% 7%
integrate video which has increased data use and makes
zero-rating less attractive for operators. Other utilities 5% 7%
Application store 8% 4%
 Zero rating could be extended to other app categories, such
as browsing. Web browsing holds a disproportionately higher Telephony 2% 4%
value to consumers than the 22% of data traffic that it Location-based services (LBS) 2% 1%
generates, or the 12% of time that it occupies. Operators
Personal information management (PIM) 1% 1%
such as SingTel in Singapore have launched daily, weekly
and monthly tariffs for accessing the Opera Mini browser
without extra data charges, which is a way to monetise
consumers’ desire to browse that is potentially more lucrative
than charging for the data usage.

Executive summary
Recommendations

The role of Wi-Fi directly affects the monetisation of cellular data services
 The role of Wi-Fi is important to mobile operators because it Figure 16: Illustration of access technologies used for mobile data and voice
directly affects the monetisation of cellular data services. coverage in an ‘inside-out’ MNO model [Source: Analysys Mason, 2015]
Mobile operators that deploy Wi-Fi run a small risk of
cannibalising their cellular data revenue. However, they also
have an opportunity to benefit from offering Wi-Fi services.
Therefore, it is vitally important that operators understand the
context of how people use Wi-Fi and cellular data and how
the two interact.
2.6GHz femtocell
 Public Wi-Fi, in particular, offers benefits for operators, such
as service differentiation and increased customer retention1.
Our Connected Consumer research suggests that people like
using Wi-Fi and prefer it to using mobile data in some cases.2
 The importance of public Wi-Fi networks may decrease as
LTE adoption increases.3 The high speeds and quotas
offered by LTE could disrupt current consumer behaviour  The role of Wi-Fi as a complementary disruptive service is
because it could satisfy their speed and price preferences. explored in ‘inside-out’ business models.4 The inside-out
approach involves fixed operators building vast national
public heterogeneous networks by crowd-sourcing Wi-Fi
access points and licensed small cells from fixed broadband
1 Public Wi-Fi hotspots are provided by mobile and fixed operators in high footfall areas, such
as retail stores, tourist attractions, food chains, coffee shops, business districts, railway
subscribers. All cells and access points operate in open-
stations etc. access mode, and additional capacity for areas with no
2 For further information, see Analysys Mason’s The Connected Consumer Survey 2015: coverage is provided on a wholesale basis by an MNO.
mobile customer retention. Available at www.analysysmason.com/CCS2015-mobile.
3 For further details, see Analysys Mason’s Public Wi-Fi worldwide: opportunities and 4 See Analysys Mason’s Inside-out wireless networks for fixed operators: the technical and
strategies for mobile operators in the age of pervasive LTE. Available at commercial challenges of HetNets. Available at www.analysysmason.com/inside-out-
www.analysysmason.com/public-WiFi-2015. networks-2014.

Most smartphone Wi-Fi traffic was generated in the home
Figure 17: Percentage of panellists that connected to Wi-Fi, by hotspot  90% of panellists’ Wi-Fi traffic that we were able to categorise
category, and the average amount of their Wi-Fi data usage attributable to and identify came from home Wi-Fi connections and 89% of
that category, Android users (n = 1211) [Source: Analysys Mason and
panellists connected to such networks. This is not necessarily
Nielsen, 2015]
a single residential connection – for example, many people
100% connected to multiple home Wi-Fi networks, presumably
those of friends and family.
Home Wi-Fi
90.4%  Beyond the home, the narrative is more fragmented – 60% of
80% consumers connected to operator-branded hotspots (for
example, AT&T, BT or O2 hotspots that were not also
Percentage of panellists
branded as community Wi-Fi), but this accounted for only

Operator
hotspot 2.1% of all Wi-Fi traffic generated. The greatest value of such
60% 2.1% hotspots, it seems, is not generally in easing the congestion
of particular macrocells, but in reinforcing brand presence
Other public
hotspot and improving QoE in areas with poor cellular data
1.0% Hotel, performance.
40% transport,
Tethering,
Café, pub,
airport
Mi-Fi
 The role of tethering is a complex part of an operator’s
2.0%
restaurant 1.5% strategy and can, in some situations, help (with the
1.5% generation of further monetisable traffic) and sometimes
20% Retail Business,
0.6% enterprise hinder (when the tethering is used instead of higher-priced
0.3% dedicated tariffs). Figure 17 indicates tethering where the
Education smartphone was not the cellular bearer – the cellular
0% 0.5% Community
connection was shared from either a Mi-Fi device, a tablet or
Wi-Fi
0.03% another smartphone.
Bubble size = percentage of panellists’ Wi-Fi data usage

The use of Wi-Fi in public locations is particularly developed in the UK

with strong community Wi-Fi and high Wi-Fi use in retail establishments
 Some country-specific trends relating to how many panellists Figure 18: Percentage of respondents who connected to Wi-Fi, by hotspot
connected to particular hotspots are worthy of note. category and country (n = 1211) [Source: Analysys Mason and Nielsen, 2015]
 The ‘other public hotspots’ category includes municipal and Country

public Wi-Fi as well as other public Wi-Fi hotspots that could Category
not be associated with an operator or retail establishment. France Germany UK USA Total
Initiatives such as Boingo and ‘Free Wi-Fi’ hotspots
Home Wi-Fi 86% 94% 93% 84% 89%
significantly increased penetration in France and the UK.
 Hotel, transport and airport Wi-Fi hotspot use was particularly Operator hotspot 77% 65% 64% 43% 61%
notable in the UK because Wi-Fi is available on trains and on
many local and national bus routes. Other public hotspots 52% 24% 55% 37% 41%
 Retail hotspots, particularly used in the UK and USA, were Café, pub, restaurants 30% 15% 38% 23% 25%
notable because they can potentially provide extra insight
into customers movements that could be sold to the retailer. Hotel, transport, airport 18% 25% 33% 23% 24%
 Community Wi-Fi in the UK includes the FON network, which
has a particularly high-profile partnership with BT. 23% of Retail 13% 5% 33% 23% 18%
panellists in the UK connected to such networks, but they
accounted for only 0.11% of our UK panel’s total data traffic, Tethering, Mi-Fi 17% 16% 19% 13% 16%
which suggests that their overall impact on cellular data is
Education 4% 9% 8% 13% 9%
negligible. It may be that some consumers connected to the
networks but were not actually FON or BT customers and
Business, enterprise 4% 5% 17% 4% 7%
hence were not able to successfully initiate a connection to
the Internet.
Community Wi-Fi 1% 6% 23% 0% 6%

Executive summary
Recommendations

The early majority demographic profile of ‘young users consume more

cellular data’ may be being disrupted
Figure 19: Monthly cellular data usage by age group, 2011 and 2013  The established pattern of younger users consuming the
(n = 1588) [Source: Analysys Mason and Nielsen, 2015] larger amounts of cellular data appears to have been
100%
>2GB disrupted among our panel.
80%
 Smartphone take-up has moved from an ‘early majority’
of panellists
Percentage
1–2GB
60%
500MB–1GB
phase of adoption to a ‘late majority’ phase. More people
40% aged 25–44 now have higher-value contracts and hence
200–500MB use more data than they did previously.
20%
100–200MB
0%  The role of Wi-Fi has changed since 2011 and has
50–100MB
45+
45+
18–24
18–24
25–34
35–44
25–34
35–44 moderated growth in the number of cellular data users in

1KB–50MB the 18–24 year-old age group (many of whom prefer
2011 2013
Wi-Fi). Improvements in video apps’ offline watching
<1KB
capabilities will also have affected this.
Figure 20: Monthly cellular and Wi-Fi data usage by country and subscription
type (n = 1588) [Source: Analysys Mason and Nielsen, 2015]
 Contract users generate more data traffic than prepaid users.
This is partly because contract users tend to have higher-
(GB per person per month)
8 specification handsets than prepaid users.

6  Wi-Fi usage is significantly higher than cellular data usage in
Data usage
Cellular
4 all countries. In the UK, much of this is related to BBC iPlayer
Wi-Fi usage. In Germany, the small increment is a result of video
2
services being less established and German consumers
0 generally consuming less media-rich content. In the USA,
Contract
Contract
Prepaid
Contract
Contract
Contract
Prepaid
Prepaid
Prepaid
Prepaid
prepaid users are particularly price-sensitive, so they tend to

rely on Wi-Fi.
France Germany UK USA Total

There is an untapped demographic of 4G-capable handset users that are

strong potential targets for upselling 4G services
 Many panellists with 4G-capable devices did not use 4G Figure 21: Percentage of panellists who use 4G services, by gender and age
services. Understanding the difference between 4G device group (n = 229) [Source: Analysys Mason and Nielsen, 2015]
ownership and 4G service usage is important because it
Age group
enables operators to identify: Gender
18–24 25–34 45–54 55+ All
 potentially easy targets for upsell to 4G SIM-only services 35–44
 where initiatives to encourage customers to upgrade to 4G Male 11% 23% 14% 5% 1% 54%
might not be working. Female 11% 16% 12% 4% 3% 46%
 Broadly speaking, the people that own 4G-capable devices, All 22% 39% 26% 9% 4% 100%
but do not yet use 4G, have a similar demographic
distribution to those that use 4G services. However, there are
some notable differences.
 Women were more likely to own an LTE-capable device Figure 22: Percentage of panellists who own a 4G-capable handset but did
that they did not use for LTE services. not use 4G services, by gender and age group (n = 235) [Source: Analysys
Mason and Nielsen, 2015]
 25–34 year olds were the most likely to own LTE-capable
devices and not use them on LTE services. Age group
Gender
 The relationship between the two series suggests that the 18–24 25–34 35–44 45–54 55+ All
upgrade to LTE is often driven by a desire for a particular
Male 6% 20% 9% 4% 0% 40%
handset, rather than for an LTE service specifically –
particularly among the 25–34 year old demographic. Female 8% 25% 15% 7% 4% 60%
 72% of 4G-capable devices that were not used on 4G All 14% 46% 24% 11% 5% 100%
networks belonged to contract users. This suggests that
there is an untapped opportunity for upsell among this group.

There is not a significant correlation between Wi-Fi and cellular data

distribution, and demographics do not appear to play a significant role
Figure 23: Distribution of panellists by Wi-Fi and cellular data percentile  Our analysis of the demographic trends related to cellular
(n = 1596) [Source: Analysys Mason and Nielsen, 2015] and Wi-Fi data usage leads us to the conclusion that there
Wi-Fi percentile are no clear patterns.
 There was not a strong skew towards the corners of
90–100%
10–20%
20–30%
30–40%
40–50%
50–60%
60–70%
70–80%
80–90%
0–10%
Figure 23, or the diagonal, which suggests that cellular

users do not automatically use less Wi-Fi, or vice versa,
and that the two do not necessarily scale equally, either
0–10% 0.0% 0.3% 0.1% 0.1% 0.1% 0.1% 0.1% 0.1% 0.1% 0.1%
(that is, someone in the 60th percentile for cellular data
10–20% 0.4% 1.6% 1.3% 1.4% 1.6% 1.3% 1.0% 0.8% 0.8% 0.9% usage is not particularly likely to be near the 60th
percentile for Wi-Fi data usage, for example).
20–30% 0.4% 1.3% 1.8% 1.3% 1.3% 1.3% 1.0% 1.1% 0.7% 0.9%
 Age and gender did not show any significant skew towards
Cellular percentile
30–40% 0.3% 0.9% 1.9% 1.7% 1.8% 1.1% 1.2% 1.2% 0.8% 0.3% particular Wi-Fi or cellular data behaviour. Understandably,
40–50% 0.4% 0.8% 1.3% 1.5% 1.3% 1.3% 1.3% 1.2% 1.1% 0.8% prepaid customers tended to use less cellular data.
50–60% 0.7% 0.6% 1.1% 1.1% 1.1% 1.5% 1.3% 1.6% 1.2% 0.9%
 This leads to the following conclusions.
 Standard demographic indicators of age and gender are
60–70% 0.5% 1.0% 0.9% 0.7% 0.8% 1.6% 1.3% 1.4% 1.6% 1.4%
not the most effective way of categorising mobile handset
70–80% 1.1% 0.9% 0.4% 0.7% 1.1% 1.3% 1.1% 1.3% 1.6% 1.1% data usage and operators will need to bear this in mind
when formulating use cases for future Wi-Fi propositions
80–90% 0.9% 0.9% 0.6% 1.2% 1.0% 0.8% 1.3% 1.1% 1.2% 1.9%
or for positioning 5G.
90–100% 1.2% 1.6% 1.0% 0.7% 0.4% 0.5% 0.8% 1.1% 1.3% 2.1%  The substitutive effect of Wi-Fi is not significantly
pronounced.

Executive summary
Recommendations

Methodology and definitions [1]
 The analysis is based on data provided by Nielsen, based on a passive on-device monitoring app developed by Arbitron Mobile.
In order to derive optimal results from the data, we have sometimes weighted results, removed outliers or used robust statistics,
in order to ensure that we provide what we consider to be the most representative view of the usage behaviour of the panellists.
 Not every respondent was in the panel for the same number of days within the observation period of 15 August 2013 to
31 October 2013. We therefore normalised results for each panellist, which resulted in an average monthly (30.5 days) usage
figure for each panellist. Country-level or OS-level results are then aggregates of these normalised monthly data points. For
example, this means that we do not give a panellist who was in the panel for 60 days twice the importance of a panellist who was
involved for only 30 days.
 As a final step to ensure that we report meaningful results, we used robust statistics such as medians where a small number of
heavy users might otherwise distort the sample (for example, when looking at average data traffic).
 Different OSs allow different levels of visibility into system processes and this sometimes results in gaps in our information for
devices from certain manufacturers. For this reason, our analysis of the results of a particular meter has sometimes been
supplemented by results from an alternative meter from which we can still infer relevant data.
 For example, Arbitron Mobile’s meters for iOS did not allow us visibility of SMS, and coverage for Symbian and BlackBerry was
not necessarily reliable. We have therefore developed a proxy for iOS SMS/MMS use by assuming that the average duration per
message sent or received was consistent across Android and iOS devices.
 The sample size for this research was 1596, consisting of 400 respondents in each of France and Germany, 399 in the UK and
397 in the USA. ‘Total panel’ metrics do not weight the ratio of responses by the size of the country, so each country is given
roughly equal weighting in this metric.

Methodology and definitions [2]
 This panel was chosen as a subset of the total Arbitron Figure 25: Panellists’ age, by country of observation [Source: Analysys
Mobile panel controlled by Nielsen such that it approximately Mason and Nielsen, 2015]
aligned with the age, gender and OS profile of the 100%
90%
smartphone user base in these countries.
80%
 Some panel bias was introduced by us selecting panellists 70% 55+
who had also answered a questionnaire about the nature of 60% 45–54
their mobile service (such as whether they were using a 50%
35–44
40%
prepaid or contract SIM card/service in the device). 25–34
30%
20% 18–24
10%
0%
France Germany UK USA Total
Figure 24: Panellists’ gender, by country of observation [Source: Analysys Figure 26: Panellists’ handset OS, by country of observation [Source:
Mason and Nielsen, 2015] Analysys Mason and Nielsen, 2015]
100% 100%
90% 90%
80% 80%
70% 70%
60% Other
Female 60%
50% 50% iOS
40% Male 40% Android
30% 30%
20% 20%
10% 10%
0% 0%
France Germany UK USA Total France Germany UK USA Total

Executive summary
Recommendations

About the authors
Martin Scott (Practice Head) is the head of Analysys Mason’s Consumer Services research practice, which
includes the Fixed Broadband and Multi-Play, Next-Generation Services, Mobile Services, Mobile Devices and
Digital Economy research programmes. His primary areas of specialisation include the bundling and pricing of multi-
play services, including quadruple-play bundling, customer satisfaction and consumer-facing marketing strategy. He
also specialises in statistics, surveys and the analysis of primary research; he co-ordinates Analysys Mason’s
Connected Consumer and Consumer smartphone usage series of research.
Aris Xylouris (Research Analyst) focuses on data modelling and collection for Analysys Mason’s Consumer
Services research practice, contributing to the Fixed Broadband and Multi-Play, Mobile Services, Digital Economy
and Mobile Devices research programmes. Before joining Analysys Mason, he held internships as an economic
analyst in the media sector, working on market analysis, financial evaluation, profitability analysis and business plan
development. His wider experience includes quantitative forecast modelling and computer simulations using agent-
based models.

About Analysys Mason
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Consumer smartphone usage 2014: mobile data usage
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Consumer smartphone usage 2014: mobile data usage

Consumer smartphone usage 2014: mobile data

© Analysys Mason Limited 2015

About this report

 This report analyses the smartphone usage of consumers in

© Analysys Mason Limited 2015

Slide no. Slide no.

© Analysys Mason Limited 2015

31. Methodology and definitions

© Analysys Mason Limited 2015

© Analysys Mason Limited 2015

Changes in handset data use

Drivers of change: LTE and device capabilities

Drivers of change: the role of Wi-Fi

Demographic analysis of data use

Methodology and definitions

About the authors and Analysys Mason

© Analysys Mason Limited 2015

Executive summary: 81% of handset data generated on smartphones in

© Analysys Mason Limited 2015

Average percentage of all traffic

© Analysys Mason Limited 2015

Changes in handset data use

Drivers of change: LTE and device capabilities

Drivers of change: the role of Wi-Fi

Demographic analysis of data use

Methodology and definitions

About the authors and Analysys Mason

© Analysys Mason Limited 2015

© Analysys Mason Limited 2015

Changes in handset data usage

Drivers of change: LTE and device capabilities

Drivers of change: the role of Wi-Fi

Demographic analysis of data use

Methodology and definitions

About the authors and Analysys Mason

© Analysys Mason Limited 2015

© Analysys Mason Limited 2015

France 20% 4% France Germany

© Analysys Mason Limited 2015

© Analysys Mason Limited 2015

Most handset data usage is on Wi-Fi so operators must adjust cellular

Smartphone users  simplification and improvement in Wi-Fi authentication

© Analysys Mason Limited 2015

The price and monthly allowance constraints of cellular data potentially

most panellists have unlimited Wi-Fi Internet access. Wi-Fi

 If cellular data were unconstrained, two things would

1000  The highest-usage consumers in our panel had a

users that exceed these numbers will have increased

© Analysys Mason Limited 2015

Changes in handset data use

Drivers of change: LTE and device capabilities

Drivers of change: the role of Wi-Fi

Demographic analysis of data use

Methodology and definitions

About the authors and Analysys Mason

© Analysys Mason Limited 2015

Average data usage (GB per month)

© Analysys Mason Limited 2015

Median data usage (GB per month)

 Other device specifications that correlate with screen

© Analysys Mason Limited 2015

© Analysys Mason Limited 2015