The iPhone and the Ensuing Wireless Broadband Boom

I have been saying for some time that the launch of the 3G iPhone was going to jump-start the demand for wireless broadband. The subsequent release of additional web-friendly mobile phones (we like to call them superphones ) — the Samsung Instinct, the BlackBerry (s rimm) Bold, the Google (s goog) Phone, and Sony (s sne) Ericsson’s Xperia X-1 — that use 3G wireless networks has now shifted that demand into high gear. [digg=]

According to data collected by Chetan Sharma Consulting, the U.S. wireless data market grew 7.3 percent in the third quarter to hit $8.8 billion in data services revenue. Despite the recession, many in the industry are of the opinion that wireless data sales aren’t going to fall, and in fact will stay strong for the foreseeable future. A report from London-based research firm Analysys Mason predicts that “mobile network operators in developed regions should prepare for a tenfold increase in wireless network traffic by 2015.” Here are some interesting findings from their report:

  • By 2015, developed regions will account for about 25 percent of the cellular user population but those users will generate 65 percent of total global wireless network traffic.
  • Average wireless network traffic per cellular user (for all voice and data services) in developed regions will increase to eight times its 2008 level by 2015, rising from 56MB per month to 455MB per month.
  • By 2015, data will account for 94 percent of total wireless network traffic in developed regions.

Such a data explosion, however, means that mobile network operators will have to spend a lot of money to upgrade their networks in order to keep up with the demand. As Dr. Alastair Brydon, the Analysys Mason report’s co-author, notes, “In the short-term, underutilisation of 3G networks allows mobile operators to offer low-cost USB services, but operators may be forced to rethink their strategies when they are confronted by the need to make further network investment.” Indeed, we have already seen how Verizon (s vz), Sprint (s s) and others are imposing data transfer limits on their “unlimited data offerings.”