Handset voice, video, and data traffic is growing so quickly that it will take up 100% of all wireless network capacity during peak times by 2012, according to Coda Research Consultancy. That is because a rise in the use of smartphones to 40% of all cell phones.
Data traffic will rise by a compounded annual growth rate of 117% between this year and 2015 and video traffic will rise at a 138% compounded annual growth rate during the same period. Mobile video will be two-thirds of all handset data traffic five years from now.
These huge increases in data traffic will make AT&T’s (T) current problems seem modest.
The issue raised by the report, if it is close to correct, is how firms including Verizon Wireless (VZ)(VOD), Sprint (S), AT&T and T-Mobile will keep up with data demand. Data interruptions and dropped calls happen with more frequency. Sprint’s 4G network will be available in many locations next year, but there is not guarantee that the ultra-fast wireless broadband will work seamlessly. The LTE networks to be set up by the other wireless carriers may not be set up for two or three years.
The growth of smartphones, which looked so promising two years ago, may be stunted by the inability of the phone companies to feed the little beasts.
Douglas A. McIntyre
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