6 Million Homes Now Use Wireless As Only Broadband Service

By the end of 2011, six million U.S. households will depend on a wireless or mobile platform (including 3G or 4G) as their only means of accessing the Internet, according to Strategy Analytics.

That means seven percent of U.S. homes are wireless-only for broadband, up about 430,000 homes over 2010 levels.

These “mobile-only” customers typically connect to broadband using 3G or 4G-enabled smartphones or PC dongles, and are unable or unwilling to use a wired broadband service such as cable, DSL or fiber, Strategy Analytics says.

The firm says there are two primary markets for such consumers. First, there are users in remote or underserved areas where dependable fixed broadband is unavailable. Secondly, there are cost-conscious casual users who use relatively small amounts of data, and for whom mobile data rates are ‘good enough.

Strategy Analytics forecasts that cable operators will claim a bit more than 50 percent of U.S. household broadband connections over the next five years, while telco-provided Digital Subscriber Line subscriptions will gradually decline in favor of fiber to home and mobile-only connections. 6 Million Homes Now Using Wireless As Only Broadband Service

Steve Jobs Originally Wanted iPhone on its own Network

When Steve Jobs first dreamed up the iPhone with his team at Apple, he didn't want it to run on AT&T's network. He wanted to create his own network, says venture capitalist John Stanton, who spent a good deal of time with the late Apple CEO during the phone's development period.

Jobs wanted to replace carriers completely, Stanton says, instead using the unlicensed Wi-Fi spectrum. Jobs would not have been the first executive to think about how Wi-Fi could literally replace use of mobile networks for mobile voice and data. There was a fair amount of such speculation in the late 1990s and earlier 2000s. Wi-fi for mobile service?

By about 2005, most began to see Wi-Fi as a complementary access alternative to mobile service. Wi-Fi becomes complementary Republic Wireless, the new mobile service provider, is the latest example of that line of thinking. 


For ubiquity, no service provider yet has shown an ability to completely displace mobile networks. 
On the other hand, for consumers, most important personal devices are equipped, or increasingly will be equipped, with Wi-Fi capability. 


So even though it remains a challenge to design a mobile phone's connectivity around Wi-Fi-only connections, the in-home environment is becoming a "Wi-Fi mostly" sort of environment. 

Steve Jobs wanted iPhone on its own network

E-Reader Sales Grow Connected Devices Opportunity

connected device forecast

A new report by analyst firm Juniper Research forecasts that e-reader shipments will reach 67 million by 2016, nearly triple the 25 million devices the company expects to reach the market in 2011.

While this is less than half the 55.2 million tablets that will be shipped this year, the price of the market-leading Kindle has fallen significantly (from $349 to $79) since it was launched, and electronic ink technology will ensure that the device continues to carve out a niche for itself in the wireless device ecosystem. eReader Shipments to Reach 67 million by 2016


Separately, Machina Research predicts wireless wide-area connected tablets and e-readers will grow from 66 million in 2011 to 230 million in 2020. Mobile service providers gain two ways from e-reader usage. There is the business-to-business revenue contributed by the e-reader partners, who use mobile networks to deliver content to the readers. 




There also is end user revenue supplied by connected devices. If half of the 2020 devices are e-readers, and just 15 percent of e-readers actually are mobile broadband connected, that is 17.25 million incremental broadband accounts in service. If, by 2020, half of the e-readers are capable of network connections, and are used as part of "family"-style mobile data plans that represent incremental revenue, then as many as 57.5 million new broadband accounts could be in service. 

Such trends are directly important for mobile service providers as many of those devices are equipped to work on mobile networks, and therefore represent a new class of devices that can be converted into new and incremental mobile broadband accounts. Greater use of Wi-Fi-only devices has relevance for fixed-network broadband providers to the extent that use of such devices increases the value of a fixed broadband connection.

Tablets are Untethered, not Mobile Devices

Ross Rubin, executive director of industry analysis for NPD Group, says the reality is that a lot of tablet usage seems to be at home or in Wi-Fi hotspot areas. tablets are untethered, not mobile

"Consumers are maybe reluctant to pay $15 or $20 a month when they may just need cellular access for a few hours," Rubin says. "Obviously, for some time there's been a lot of discussion about per-person billing versus device-based billing, and the tablet situation has really made that more of a real issue versus a theoretical issue."

In other words, if mobile service providers want to encourage more tablet use on mobile broadband networks, they probably will have to start offering the equivalent of mobile broadband "family plans" now common for voice and text messaging services.

ABI Research reports that less than half of tablets actually ship with a cellular modem, and less than half of those are ever actually activated after shipment.

Device Usage Profiles: "Tethering" is a Big Deal

If you want to know why “tethering” of mobile devices is such a big issue for mobile service providers, consider that mobile PCs, including those which might be tethered to a Mi-Fi device or use a smart phone’s Wi-Fi hotspot feature, can use between 1 GByte and 7 Gbytes worth of data each month, according to new data provided by Ericsson.



A smart phone, by way of contrast, might use about 500 Mbytes a month. So demand-sensitive mobile networks might well be leery of encouraging use of the network by devices that create an order of magnitude greater demand than a typical smart phone.



At some level, even though mobile service providers might like to have the additional revenue and accounts mobile PC connections represent, it is inherently more difficult to maintain a user experience free of cap overage fees, which irritate users.



You might argue that service providers can simply offer bigger buckets of usage, but some might argue that will confuse many users.



Mobile PCs have the highest average monthly traffic volume per subscription over 3G networks (global average at 1 Gbyte to 2 GBytes), followed by tablets at 250 Mbytes to 800 MBytes. Smart phones typically use only 80 Mbytes to  600 MBytes.



The point is that a 4-Gbyte or 5-Gbyte data plan so outstrips typical usage of smart phone and tablet users that there is little chance most people would ever be faced with an unpleasant overage charge. That clearly is not the case for PCs connected to mobile networks, which rather easily can consume all of a 4-Gbyte or 5-Gbyte data plan.



Average monthly data traffic varies significantly between different types of devices, according to a new Ericsson report on mobile bandwidth and trends.



Another observation might be that “overage” and “breakage” are significant contributors to mobile broadband service profit margins. Ericsson reports that “breakage” (paid for, but unused megabytes in a data plan) ranges from a low of about 15 percent for users of 1-gigabyte plans up to about 60 percent for data plans of 15 Gbytes to 20 Gbytes.



Also, “overage” (use of more data than a user has paid for as part of the device data plan) ranges from about 30 percent for users of 1-Gbyte plans to about 12 percent for users of the the 15-Gbyte to 20-Gbyte plans.

Smart Phone Data Consumption Grows 427% on "Three" Network

U.K. mobile service provider Three says 97 percent of all the traffic on its network is data.

Also, since June 2010 and September 2011, there has been a 427 percent increase in data usage on Three, by smart phone customers.

  Data is 97% of Three traffic

How Much Will Tablets Drive Mobile Bandwidth Consumption?

Goldman Sachs figures tablet data consumption is increasing by 30 percent per year and by 2020 will account for 17 percent of all mobile data demand.

“We expect global tablet sales to grow over 300 percent through 2012,” Goldman’s analysts say. “Our forecast implies a 42 percent compound annual growth rate from 2010 to 2020 in network-activated tablet subscribers (tablets that actually subscribe to a wireless data plan) with monthly data usage assumed to grow at the rate of 30 percent per year from 1.5 GBytes month to over 20 GBytes per month in 2020,” Goldman analysts say.

That implies some future adjustment of mobile broadband plans, which at present tend to cap consumption at 4Gbytes to 10 Gbytes a month, with an average of about 5 Gbytes. Though it seems unlikely that smart phone consumption will reach those levels, tablet users using mobile broadband connections might easily exceed 5 Gbytes a month, if the Goldman estimates are correct.

How Much Will Tablets Drive Mobile Bandwidth Consumption?

Smartphones and Tablets Drive Nearly 7 Percent of Total U.S. Digital Traffic - comScore, Inc

Wi-Fi Offload podcast

Mobile phones and tablets now represent 6.8 percent of U.S. traffic in August 2011, with approximately two thirds of that traffic coming from mobile phones.

And users are shifting 37 percent of their mobile device access to fixed connections, using Wi-Fi. The percentage of usage grew nearly three percentage points in just three months.

In August 2011, nearly 10 percent of traffic from tablets used a mobile network connection, a fact of some importance for mobile service providers, since that means additional revenue.

Today, half of the total U.S. mobile population uses mobile media. The mobile media user population (those who browse the mobile web, access applications, or download content) grew 19 percent in the past year to more than 116 million people at the end of August 2011.

Smartphones, Tablets Drive 7% of U.S. Traffic

Mobile Broadband Faster than Fixed Line?

There is an interesting bit of data in the latest report from Akamai on global Internet usage. The global average fixed-line connection speed was 2.6 Mbps, and the global average peak connection speed was 11.4 Mbps.

Looking at mobile broadband connections, average connection speeds on known mobile providers ranged from 5.3 Mbps down to 209 kbps, while “average” peak connection speeds ranged from 23.4 Mbps down to 1.2 Mbps.



The interesting observation is that wireless broadband has the higher peak speeds, about double that of fixed line connections, with a variable “average” speed that in some cases also is twice as high as fixed-line connections, though such sessions are highly variable. When mobile broadband is slow, it is an order of magnitude slower than fixed line connections. Global broadband speeds

Is "4G Plus DirecTV" a Viable Alternative to FiOS?

Verizon Wireless seems to be cooking up an out of market “video plus broadband” plan, working with DirecTV. During its recent quarterly earnings report, Fran Shammo, Verizon Communications EVP said that the company was working on such an effort.

“You're going to see that come in the fourth quarter with the what we now call the Cantenna, which is not a commercial name obviously, but it's the antenna that we actually trialed with DIRECTV, which was extremely successful,” said Shammo.

Some will legitimately wonder whether that approach might even wind up being used in some Verizon markets where FiOS has not already started to be deployed. LTE plus DirecTV

There are some significant Verizon markets including cities like Boston, Buffalo, N.Y, Baltimore and Alexandria, Va. where FiOS construction has not started.

The obvious new question is the rational approach Verizon should take to upgrading its fixed-line network. There isn’t much doubt about optical access media being more resistant to some weather-related impairments than copper networks, nor is there much doubt that new optical facilities cost less to maintain than older copper networks.

But the business question is how much incremental investment ought to be made in the fixed network,  if video and broadband services can be provided using the wireless network. One might rationally argue that the cost of maintaining the fourth generation wireless network is lower than the cost of maintaining the FiOS network.

Obviously, if that is true then the avoided capital investment in new optical facilities is significant as well. That isn’t to argue that fixed and wireless networks are in any way equivalent in terms of absolute bandwidth. But there is a financial question.

If the expected revenue and operating cost advantage of FiOS, compared to 4G, does not provide the optimal financial return, then a wireless solution might be the most-rational way to invest new capital.

The problem is that voice is a negligible contributor to incremental revenue on a FiOS network, while video, though an important contributor of revenue, is not such a great contributor to profits. That leaves broadband, and revenue upside is tough.

That is not to say fiber to home facilities are unimportant, merely to say that they might not be the best use of capital for a provider that also is investing heavily in mobile broadband.

In fact, there is an interesting bit of data in the latest report from Akamai on global Internet usage. The global average fixed-line connection speed was 2.6 Mbps, and the global average peak connection speed was 11.4 Mbps.

Looking at mobile broadband connections, average connection speeds on known mobile providers ranged from 5.3 Mbps down to 209 kbps, while “average” peak connection speeds ranged from 23.4 Mbps down to 1.2 Mbps.

The interesting observation is that wireless broadband has the higher peak speeds, about double that of fixed line connections, with a variable “average” speed that in some cases also is twice as high as fixed-line connections, though such sessions are highly variable. When mobile broadband is slow, it is an order of magnitude slower than fixed line connections. Global broadband speeds