Mobile data and the 40:1 rule

We’ve said it for a long time now – the majority of mobile phone subscribers are being penalised by the excessive use of a tiny handful. Why? Because tariffs are structured so that we always end up paying for services we don’t use. Who wants to risk reaching their meagre data limit and – woe betide – exceed it and incur huge financial penalities? As a result, we all under-use data to ensure we stay within our limits, and end up paying over the odds per megabyte. Well, most of us at least.

A new research report from Arieso suggests that a mere 1 per cent of mobile subscribers are responsible for 40 per cent of all mobile data consumed. Amazingly, all the effort by operators to provision their networks to support this huge data tsunami that is apparently heading our way – and the justification for them maintaining their high tariffs and complex penalty structure – is all down to 1 per cent of users. So rather than target this minority, they continue to treat all users equally.

It’s the third year that Arieso has studying mobile data usage. Last year, the 1 per cent ‘heavy users’ were responsible for even more data – 50 per cent of the total, so the reduction this year is good news for network planners. However, looking more closely at the data and we see that whilst 1 per cent consumes 40 per cent of data, 0.1 per cent consumes 20 per cent of all mobile data. So, for every 1,000 customers, one single person is responsible for 20 per cent. This is the same amount of data that 90 per cent of subscribers consume – in other words, for every 900 users there is a single person consuming an equal amount of data.

Obviously these statistics demonstrate a classic distribution bell curve; it’s what mathematics would dictate in an equilibrium system. But it reinforces the point that current pricing models are unfair – service providers penalise average users as they try and cover the entire subscriber base as easily as possible.

Note also that Arieso’s figures refer to downlink data usage on 3G/UMTS networks, and were taken from detailed analysis of an unnamed tier one European operator. However, the firm says the results are relevant to operators around the world because relative consumption between device users remains constant between geographies. Arieso also offers services to operators, so judge the impartiality of its research for yourself.

Study author and Arieso CTO, Dr. Michael Flanagan, says that wherever they are in the world, operators have to deal with similar challenges created by extreme data use:

“Every year, the situation gets tougher and more complicated. But it is worth remembering two salient points. One, that these challenges only result from our industry’s incredible success in creating devices, services and networks that billions of people want to use every hour of every day. Two, that these puzzles are surmountable through careful attention to the needs of subscribers where they demand services from the network.”

In other findings, Arieso says that iPhone 5 users are the “hungriest” data consumers, demanding 50 per cent more than iPhone 4S users and four times as much as iPhone 3G users. Out of 125 devices studied, users of the iPhone 5 again proved the most voracious data consumers. However, Samsung Galaxy S III users generate (upload rather than download – photos, videos etc.) far more content than iPhone users, beating iPhone 5 users into third place on uplink data usage behind the Samsung Galaxy Note II. Somewhat surprisingly, network-connected Samsung Tab 2 10.1 users consume 20 per cent more mobile data than iPad users.

Still, smartphone users consistently consume more mobile data than tablet users, as LTE networks start to come on line. LTE is also responsible for continuing interest in dongles. But Flanagan warns that 4G networks won’t ease the pressure on operators as they try and meet the mobile data demand:

“From our own experience helping operators around the world prepare their networks for evolving user demands, we hypothesise that LTE alone won’t ‘solve’ the data problem – it will exacerbate it.”

So we come back to the use of efficient use of networks, and whether or not there is a clever way to rebalance data usage and charge in a fairer way. Yes, we are already seeing time-shifting incentives from fixed broadband operators, allowing their heavy users to bit-torrent to their hearts’ delight – so long as it’s between the hours of midnight and 6am, when “normal” folk are content to leave their broadband well alone. Would it work for mobile? Probably not.

Meanwhile, mobile operators are probably happy for their customers to remain in a state of panic about their data usage, ensuring they grossly under-use their allowance and consequently ease some pressure on the networks. It’s all wrong, and a better approach is needed. So who’s going to step forward with a solution?