You can’t talk about the wireless industry in this country without hearing about a spectrum shortage. FCC Chairman Genachowski said last month a looming shortage threatens innovation and the spread of wireless broadband. Others say no, there isn’t a shortage. Analysts in this ReadWriteWeb article claim the problem is who owns the spectrum, where it is licensed and and how it being (or in many cases not being) used.
GigaOm ran an interesting piece today focused on AT&T’s most recent data growth numbers. Consumer data usage is growing quickly on AT&T’s network, and this growth was used as one of the justifications for the attempted acquisition of T-Mobile. growing data usage on its networks. In March of 2011 AT&T projected data growth of 8x to 10x between 2010 and 2015:
Data Traffic Projection from AT&T, March 2011
However, last month AT&T senior executives told investors that data growth appears to be holding at 40% growth per year. That’s a strong rise but only equals 5x growth by 2015. So what’s really going on?
The article points to two actions taken by AT&T that has slowed the growth, and presumably the presumed need for more spectrum, down considerably.
One was the introduction of tiered data plans in place of unlimited usage. This has led to an increase in consumers looking to use Wi-Fi whenever possible with their smartphones and tablets to conserve their 3G minutes. The other was aggressively going after “data hogs,” by warning and then throttling unlimited plan holders whose monthly data usage puts them in the top 5 percent in their market. These users were grandfathered in after AT&T changed its bandwidth offerings in June 2010.
So what does that say about a spectrum crunch? The issue is a complicated one, because it combines market factors and the public interest. (Whether or not you believe the FCC does a good job of representing the public interest). One thing AT&T’s traffic growth seems to tell us is that we’ve got another 2-3 years to get spectrum allotment done right.