As I pointed out last week, despite growing skepticism over “What happened to the spectrum crunch?“, the FCC Chairman has been busy making speeches about how “U.S. mobile data traffic grew almost 300% last year, and mobile traffic is projected to grow an additional 16-fold by 2016″ and asserting that
“There were many skeptics [in 2009] about whether we faced a spectrum crunch. Today virtually every expert confirms it.”
One would assume that the FCC Chairman regards the CTIA as experts, because after all they have been amongst the foremost cheerleaders for the spectrum crunch over the last three years. Indeed, upon releasing their latest wireless industry statistics, CTIA’s press release on Thursday proclaimed that “Wireless Network Data Traffic Increased 111 percent and Highlights Industry Need for More Spectrum”.
However, the press release buried the far more significant message in the CTIA’s actual data (which counts wireless network traffic from 97% of all US wireless subscribers – it is unclear if any WiFi traffic is included, but it appears not), namely that growth in data traffic per device came almost to a full stop in the first half of 2012 (compared to the previous six months), presumably due to a combination of:
1) changes in user behavior (offloading to WiFi),
2) dilution from less active users buying smartphones, and
3) data caps beginning to impact some high end users.
According to the CTIA survey, total wireless data traffic in the US in the first six months of 2012 was 635B Mbytes, up only 21% on the 526B Mbytes recorded in the previous six month period. This compares to the 54% growth seen in wireless data traffic between H1 and H2 of 2011, and the 51% growth in traffic between 2010H2 and 2011H1.
Even more remarkably, with the number of smartphones and wireless connected tablets growing by 16% between 2011H2 and 2012H1, data traffic per device was only up about 3% (based on the average number of devices in each 6 month period), compared to 29% between H1 and H2 of 2011 and 23% between 2010H2 and 2011H1.
As shown in the chart below, if we extrapolate this same growth in traffic per device to the second half of 2012, then total data traffic during the period will be about 750B Mbytes, and total traffic for 2012 will have increased only 60% compared to 2011. That is only half of Cisco’s Feb 2012 estimate of 118% growth in North American mobile data traffic between 2011 and 2012, and would clearly force a complete re-evaluation of future traffic projections. However, just from the data in the first half of 2012, we can already see that traffic growth is clearly not “exponential” and has now passed its peak. More importantly, if growth in traffic per device has been brought under control, then a spectrum crunch is no longer possible in the foreseeable future, because smartphone penetration is already approaching saturation.
As others have pointed out, “there is no more scarcity of wireless spectrum than there is a shortage of, say, the color purple”. Its therefore perhaps ironic to note that back when the last Emperor Julius (Caesar) was in charge, “virtually every expert confirmed” that the color purple was expensive, difficult to find and limited by regulatory fiat to a tiny elite group.