It looks like mobile phone providers will have video to thank for their increased revenues over the next few years. According to a new study by British research firm Coda Research Consultancy, U.S. mobile data traffic will grow at a rate of 117% through 2015.
What does that mean? As smartphones become more commonplace, phone companies could start charging a lot more money to keep them up and running. But consumers may not go along willingly.
For instance, with its exclusive access to the iPhone in the U.S., AT&T has gotten a lot of flak for not being able to keep up with the bandwidth demands of its users. Mobile providers are going to have to move quickly to get ahead of the eight ball on mobile data consumption. And chances are, they’ll be passing those costs on to consumers.
According to Coda, U.S. mobile handset data traffic will grow from 8 petabytes per month this year to 327 petabytes per month in 2015. That’s a 117% compound annual growth rate.
And the bulk of that growth is going to be in video consumption, according to Coda. The company estimates that mobile data revenues (not including SMS) will comprise 87% of all data revenue for carriers by 2015. Coda also estimates that the number of mobile video users will rise by 34% annually to reach 95 million in 2015.
And that means consumers will likely say goodbye to all-you-can-eat mobile data plans. According to Steve Smith, co-founder of Coda:
“Flat rate pricing has helped drive mobile internet adoption, but we envisage that as smartphone penetration rises and as carriers roll out 4G, carriers will have to move toward tiered pricing.”
While it’s likely that tiered pricing could be implemented in the short term, it doesn’t seem like a long-term fix for mobile usage.
For starters, it could get extremely confusing for consumers. Keeping track of minutes and seconds is one thing, but most consumers would be hard pressed to estimate how much data they consume on a daily basis. The reality of having to deal with that could put a usage cap on what consumers are willing to do in the mobile space.
Coda estimates that smartphones will make up 98% of handset traffic by 2015. But considering how much it could end up costing consumers to view and download all the content that companies are rapidly making available in the space, there are more than a few reasons that costs could put a cap on how quickly (and how much) consumers will dive into the mobile space.
Top image: BestinCellPhones