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As Mobile Grows, RIM Touts Data Efficiency

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As Mobile Grows, RIM Touts Data Efficiency
July 24, 2009
By Gary Kim, Contributing Editor


The U.S. wireless data market grew five percent quarter over quarter and 32 percent from the first quarter of 2008 to reach $10B in mobile data service revenues, the first time the U.S. market has crossed the $10B mark, according to mobile data analyst Chetan Sharma.

Mobile data usage was up 30 percent in the second quarter of this year, thanks in part to streaming video and music, according to statistics gathered by Allot (News - Alert) Communications, which notes that "what is most noticeable from the data gathered in this report is that subscribers are treating their mobile networks much the same as they treat their fixed networks."

"This is particularly true for heavy data users who seem to expect the same service from the Internet, irrespective of their access method," Allot says.

At least some of that growth was driven by flat rate, unlimited usage data plans. All the major carriers seem to be offering flat-fee access plans for most of the new smart phones being introduced in the market and about 17 percent of data users have flat-rate data plans. That will keep growing.

RIM co-CEO James Balsillie thinks that is an advantage for Blackberries. There are two reasons. BlackBerry (News - Alert) users are not heavy mobile Web users. Also, since the leading driver of mobile data consumption is streaming video, which requires 100 times the bandwidth of a voice call, BlackBerry users put lighter loads on networks than users of Apple (News - Alert) iPhones, Balsillie argues.

"And so the bottom line of it is if you can take something that’s two packets and make it one, you double the battery life and you double the network capacity and you double the speed," Balsillie says.

"So, you’re running a 5 kbps voice call and somebody’s trying to stream a TV show for a 100 kbps or a 80 kbps, I mean, you’re taking away 10 to 20 voice calls of capacity," he says.

That’s one way of emphasizing value for mobile operators. The other angle is that some new businesses, such as mobile Web advertising, will be effective to the extent that usage is heavier. And there the Apple iPhone (News - Alert) alone represents nearly half of all mobile Web activity. Blackberry users simply are not heavy mobile Web users.

That might be useful in terms of mobile carrier network investment. But light mobile Web use is a barrier to creation of new businesses and revenue based on content downloads, application sales or mobile advertising.

Gary Kim (News - Alert) is a contributing editor for TMCnet. To read more of Gary’s articles, please visit his columnist page.

Edited by Patrick Barnard

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