June 2010

On June 30, AdMob released its latest Mobile Metrics Report, which highlights the rapid rise of global smartphone usage over the past two years.

Indeed, in every region of the world, mobile traffic has increased at least four times -- and in some areas, 11 times -- from that of 2008 levels. Aside from increased data demand and web usage, the comparisons of popular handsets and mobile platforms used over time illustrate dramatic shifts caused by the likes of relative upstarts, Google and Apple. The trends captured by AdMob's data reinforce Tofel's concerns about companies such as Nokia, which rely on a broad range of feature phones -- with a particular focus on emerging countries, no less -- to offset a lagging smartphone strategy. While smartphones currently account for a small percentage of overall worldwide handset sales, they show the most growth -- 48 percent in the first quarter of 2010 over the same quarter a year prior, reports Gartner -- and potential as hardware prices decline. The most worrisome example of a feature phone strategy in upcoming regions is evident in AdMob's look at worldwide operating system share.

With heavy data usage becoming mobile operators' biggest problem, the unsustainable practice of building out networks to meet consumer demands will have to give way to throttling the IP core with smarter, more proactive solutions that mitigate the need to continuously invest in cell sites, radio network controllers and fiber-based Ethernet backhaul.

Delivering that type of network intelligence is the goal of a new radio access network (RAN) congestion solution from Openet, designed to enable network congestion "forecasting," to help operators make real-time traffic management decisions before subscriber experience is impacted. The key idea behind the Openet solution is that in order to resolve network congestion, operators must move toward subscriber-aware solutions that not only recognize real-time subscriber behaviors and activities but that also enforce policies that allow them to prioritize customers during busy- or peak-hour times of usage. Rather than arbitrarily block or cap certain users' usage, operators should be able to distinguish premium customers from others and allow revenue-generating activity to continue even if busy-time levels have been exceeded.

The Center for Democracy and Technology filed a complaint June 30 with the Federal Trade Commission against an online data aggregator and broker that the group claims has engaged in unfair and deceptive practices.

The complaint alleges that Spokeo Inc. has violated the Fair Credit Reporting Act and engaged in unfair and deceptive business practices. Spokeo advertises itself as a "search engine specialized in organizing people-related information from phone books, social networks, marketing lists, business sites, and other public sources." By searching for an individual's name, information about his or her address, interests, occupation, "wealth level" and "credit estimate," among other items, appear. CDT claims that Spokeo provides a consumer report without the protections required by the FCRA. CDT cites missing legal protections, such as limitations on who can access the personal report and making individuals aware of adverse actions that can be taken as a result of information obtained in the report. CDT also claims that Spokeo's data is not reliable and that it makes money by getting people to sign up for more in-depth reports featuring personal details such as estimated income and investments -- information it may not have.

[Commentary] AT&T's shift away from unlimited data pricing has led us to examine the issue of data consumption in the United States. The Nielsen Company collects phone bills from more than 60,000 mobile customers every month and analyzes every line item on the bill. These bills show how much data each customer has consumed in the previous month, regardless of whether the customer is on a metered or unlimited data plan, in order to give customers the opportunity to understand their data consumption habits. When we look at smartphone data consumption distribution and year-over-year change, we see a large disparity of usage among smartphone users and are struck by the staggering amounts of data used by the heaviest users.

We find that: 1) About 20 million current smartphone users are hardly using data. 2) Usage-based pricing may be more fair. 3) There's a growing need to educate smartphone users -- a quarter of smartphone users are not using their device for data services at all. 4) More than a third of smartphone users have not yet signed up for a data plan.

Roger Entner is senior vice president and head of research and insights for the Telecom Practice of Nielsen.