Mobile Data Usage Increases In Inverse Proportion To Cost

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Mobile Data Usage Increases In Inverse Proportion To Cost

Mobile Data Usage Increases In Inverse Proportion To Cost

Reports released by various analytic companies have revealed that the consumption of data through smartphones has been increasing rapidly. However, the cost of this data usage has been going down.

Nielsen has also corroborated this information in the USA. According to them, the average amount of data being consumed by users is higher than ever before.

In particular, users of iPhones and Android based phones are consuming very high amounts of data.

The average smartphone user consumed 435 MB of data per month in the first quarter of 2011 as compared to only 230 MB per month in the first quarter of 2010. That is an increase of 89%.

The report further reveals that the top 10% of users are consuming 109% more data than they did last year, while the top 1% of users are consuming 155% more data than they did last year.

It is also of interest to note that those using Apple’s iOS consume an average of 492 MB per month, while Android users are consume an average of 582 MB per month.

In spite of this huge jump in data usage, the revenue generation of mobile operators continues to remain more or less static. This is because the cost of data consumed has gone down quite drastically from 14 cents per MB last year to the present 8 cents per MB.

A recent report had also pointed out a similar trend, wherein, the projected revenues of mobile operators are likely to reach $1 trillion by 2016, but their handling costs will go up at an even faster rate, thus leading to a financial disaster, if corrective steps are not taken soon.

While each operator will have to take individual decisions about what would best serve their purposes, it might boil down to them having to gradually discontinue unlimited data plans, which are very popular at present, and instead introduce usage based structured plans in the near future.

Update: US mobile operators are already resorting to the uninnovative approach of limiting mobile data use. Verizon will introduce tiered pricing on July 7. While this might be a good way to limit damage quickly, it leaves plenty of room for a smart start-up to offer unlimited packages and win public favour quickly.