The mobile data recession

With BlackBerrys now available on fairly cheap monthly tariffs, and the iPhone becoming a default at upgrade time, the mobile internet has never been so widely available and democratised. Data usage is set to rise 42% in Western Europe in the next 5 years and much of this is at the expense of voice revenue and texting as users seek to take advantage of inclusive data bundles.

Come on admit it, as soon as we get any signal on the Tube, out comes the phone as we cannot bear to be without Angry Birds, Facebook, e-mail or even a quick preview of the evening’s TV. Don’t say it’s just me.

Yet with mobile operators giving away vast data allowances to encourage take up of smartphones, they are rapidly realising that they have, to a certain extent, ‘shot themselves in the foot’ – given that huge usage increases are fast placing pressure on network pricing structures.  A ‘data crunch’ is now inevitable: the networks are creaking towards capacity and the leading operators need to take steps to remedy this.

A tiered system is already creeping in where data is sold in bundles rather than being endlessly given away. O2 are quick to address concerns and state that even the lowest inclusive bundle of 500MB will be enough for 97% of smartphone customers. Nevertheless, for most of us mortals, what does 500MB even mean? It took us long enough to figure out how many texts we needed a month let alone deciphering how many ‘giga-‘ ‘mega-’ or kilo-bytes there are in an e-mail or a movie clip. Answers on an SMS – after all, who uses postcards?

It is understandable that networks need to address the revenue shortfall but what will this mean for the thousands of youths for whom their smartphone is their main means of communication with the world? Parents have finally managed to get their teens away from their bedroom laptops and from hogging the family computer. Our young ones have been exploiting this new found freedom of social networking and internet access at their fingertips. With this new system, they will perhaps be the ones who suffer the most.

Often avid users of MSN, social networking sites, and video downloads, these are the functions that consume heavy amounts of data making the default 500MB stretch less far than one thinks. Conversely, e-mail, which is arguably less heavy on data allowances, tends not to be such a key medium for teens.

It does feel a bit like they’ve been given the world for it suddenly to be taken away again. It may well involve a step backwards as young people are once again forced to wait their turn for the family computer, or alter completely the ways in which they consume media altogether.

But should we feel sorry for these kids when there is evidence to suggest they are the ones responsible for the network congestion? File sharing is rife amongst teens and it’s precisely this sort of ‘data hungry’ activity that the networks see as an exploitation of their ‘unlimited’ services.

What it means for certain is that nearly all of us will be reverting back to the old days (remember the days before unlimited everything?) where we fear going over our allowance. Maybe, just maybe, we’ll start to use our phones to talk to each other again?