Average data usage is increasing, despite data caps

Published: August 18, 2011

With always-connected, pocket-sized computers at our constant disposal, it's hard not to use them each and every time we get a spare moment. Hop on Twitter and tell your friends what you had for lunch, check your Google Reader, Facebook, movie times … you get the point. And there are millions of us who do this constantly, day in and day out.

Up until the middle of 2010, all of the major national carriers offered somewhat affordable, unlimited data plans for individuals and families. You could browse the Internet and consumer as much data as you could possibly manage each billing cycle without the worry of exceeding your monthly limit. There were no limits.

Over the past four years, data usage has overtaken voice calling, and its taking its toll on wireless networks – which were not meant or built to withstand such constant, high levels of traffic. This has put US carriers in a bind. Their wireless (3G) networks are on the fritz and providers are in a scramble to salvage what they can. The solution? The next generation in wireless technology, 4G.

Long Term Evolution (LTE) is the 4G technology of choice for both Verizon and AT&T, and T-Mobile and Sprint both plan to make an LTE transition further down the road. But as transitions from one wireless technology go, this is a slow-moving process. Carriers have to build out the new network gradually, despite a spectrum crisis. They must also release phones compatible with new technology and, of course, backwards compatible with the existing network. To prevent their existing 3G networks from totally failing, these operators need a more direct and instantaneous approach: tiered data.

To the dismay of all the wireless enthused, AT&T was the first carrier to introduce tiered data back in June of 2010. It was only a matter of time before other carriers took their seat on the bandwagon. T-Mobile and Verizon followed in Ol' Blue's footsteps, leaving Sprint as the only national carrier offering a truly unlimited data plan.

Like I explained, tiered data was introduced to slow traffic and relieve wireless networks of some of the stress. Many developers and content providers like Bob Bowman, CEO of MLB Advanced Media, are concerned that data caps threaten and cripple the potential of their services. Marguerite Reardon of CNET quotes Bowman:

They're trying to get their best customers to never use data,” and, “I just can't see how this would be good for anyone in the business distributing rich media.”

Although rich media distributors may be worried about the success of their endeavors, it appears that these providers have little to worry about. Instead of data usage going down due to the data caps, it has actually increased … a lot. In her article, Reardon details a study done by Validas, a firm that analyzes wireless bills for consumers. The Validas study reveals some interesting information on how little tiered data has affected smartphone data usage.

Smartphone Data Usage

The average Verizon customer used 206.6MB of data during the second half of 2010. During the first half of 2011, however, that number rose a whopping 150 percent to 512.4MB. (Remember, Verizon did not implement tiered data until last month. Valida's study does not include tiered data on Verizon.) Likewise, Sprint customers' average data usage rose 69 percent and AT&T customers are using 116 percent more data in 2011. T-Mobile, on the other hand, was the only one to experience a decline in data usage – down 2 percent.

Seeing this increase of data usage by AT&T customers is rather surprising. It's easy to make the assumption that data caps would force users to use less data overall, simply for the fear of overages. So why is data usage going up? My best guess is dependency. We're gradually surpassing the luxury phase of smartphone data and entering the days where being always-connected is almost a necessity. It is also possible that these users had the larger 2GB plan to begin with and simply were not using it to its fullest potential.

What's more interesting than average data going up, however, is the fact that T-Mobile customers are using less data on average, when exceeding your data allotment only means your speeds will be throttled – save for the 200MB plan. Although I rarely use more than 100MB of data per month on my secondary, T-Mobile line, it's on a 5GB plan and I use it scarcely to avoid exceeding my limit. It's ridiculous, I know. But something about a data cap worries me, and this could possibly be the reason behind a decrease in T-Mo customer data usage. Then again, subscriber loss could also have something to do with it (more heavy users jumping to Sprint for truly unlimited data, etc.).

With tiered data having such a small effect – or not the desired effect – on customers, I'm sure the carriers have a trick or two up their sleeve. We know they don't like to compromise, so I'm not exactly eager to find out what the results of this study will ultimately mean.

Tell me, readers. Do you have a data cap? If so, what is the cap and how much data do you use per month?

Image via Buzzard Blog

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