AT&T Data Traffic Up by A Hundred Percent

February 16, 2012, By Sanjeev Ramachandran

More smartphones also means more data usage. The smartphone industry is indeed on a growth track, enabling more people to use more data on the go.

Now AT&T is claiming that its mobile data traffic is doubling every year, rather than increasing by the just 40 percent annual rate it detailed in recent investor and analyst calls.

AT&T Senior EVP of technology and network operations John Donovan wrote in the carrier’s Innovation Space blog : “…when the year-end numbers show a doubling of wireless data traffic from 2010 to 2011 – and you’ve seen at least a doubling every year since 2007 – the implications are profound”.

Over the past five years, AT&T’s wireless data traffic has grown 20,000%. The growth is now driven primarily by smartphones.  Add to that new customer additions and the continuing trend of upgrades from feature phones to smartphones, and you have a wireless data tsunami.

So what’s with a 40 percent and a 100 percent? According to WSJ, the typical AT&T smartphone customer increased his mobile data consumption by 40 percent over the last 12 months.

The 100 percent number is for overall mobile data traffic on its network, factoring in the increased usage of its existing subscriber base along with the burden millions of new smartphones brought to its network.

AT&T is trying to convince the public it is running out of capacity. And the 40 percent is for the investors and analysts who are more concerned with traffic increases AT&T can’t monetize.

Let us explain. A customer on a 2 GB plan who increases his monthly usage from 1 GB to 1.4 GB doesn’t pay AT&T an additional dime. But a new subscriber represents an entirely new monthly revenue stream. If AT&T’s traffic grows from new subscribers, it has more money with which to add network capacity.

Having said all that, AT&T’s data traffic is growing at a slower pace than the rest of the U.S.wireless industry. Cisco Systems’ new Visual Networking Index projections found that mobile data traffic throughout the U.S.increased by 172 percent in 2011, meaning other operators made up more ground.

As of the fourth quarter, AT&T had an industry leading 56.8 percent smartphone penetration, meaning a smaller headroom for growth in data traffic compared to others.

Also, AT&T’s efforts to restrict data usage among its customers seem to be working, with  AT&T’s customers only increasing their consumption by 40 percent each year, compared to the U.S. average of 156 percent annually estimated by Cisco.

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