Businesses and consumers continue to push more mobile data usage and communication providers need to take notice and reevaluate their data cap plans or risk being left behind.
In fact, global mobile data traffic is expected to hit 52 million terabytes this year, a whopping 59 percent jump from 2014, according to research firm Gartner. And it is not expected to slow down anytime soon as Gartner is predicting mobile data levels to hit 173 million terabytes through 2018. This massive data usage will force increase competition among communication service providers and force them change their data plans to win market share, the research firm said.
"Mobile data traffic is soaring worldwide, more than tripling by 2018," said Jessica Ekholm, research director at Gartner, in a prepared statement. "New, fast mobile data connections (3G and 4G) will grow more slowly, from 3.8 billion in 2015 to 5.1 billion in 2018, as users switch from slower 2G connections and consume more mobile data,” she said.
Streaming videos is driving the rapid mobile data usage, specifically families with children where communication service providers have developed data sharing plans between devices, according to a recent Gartner survey. The mobile app survey, conducted last year, asked 1,000 smartphone users in the United States and 1,000 in Germany about their mobile app usage habits.
"Germany and the U.S. provide two distinct mature markets from which we can make good comparisons about CSP strategies and their impact on broader consumer behavior," Ekholm said. The survey showed that U.S. users are less restricted and more likely to watch videos and use larger amounts of data via mobile device than German users.
In fact, 36 percent of U.S. users said they would wait until they get to a Wi-Fi area to download an app or stream content, while 54 percent of Germans users said they would hold off, according to the survey. Reason being is that U.S. users feel less restricted by their data plans, Gartner said. Supporting this, U.S. users stream 17.4 minutes per cellular video session vs. 10.6 minutes for Germans.
"With video usage as a percentage of total data usage set to rise from 50 percent now to 60 percent by 2018, we should expect CSPs to offer the best-of-breed video experience to consumers," said Ekholm. "This involves using video optimization technologies and caching content closer to the consumer. Contract plans that single out video traffic to allow users to reach a certain cap (without touching their contract data cap) will increase usage and revenue for CSPs and meet consumer demand for more mobile video.”
But streaming video over cellular networks isn't just for children and young adults, although they are driving the usage growth. In the United States, 47 percent of 45-54 year olds surveyed stream 15 minutes or more of mobile video apps over cellular networks per session, whereas only 40 percent of 18 to 24 year olds stream more than 15 minutes, according to Gartner.
"The key to obtaining long-term revenue growth for CSPs is how effectively they can market and sell the value of more expensive high-cap or unlimited data plans to their customers," Ekholm said. "The evidence is that once customers commit to a larger plan, their usage habits change significantly, resulting in longer-term revenue benefits for CSPs. This shows evidence of pent-up demand and an opportunity for those CSPs able to create the right package."