Mobile Internet traffic: smartphones play only a minor role on the world stage. Much more is needed to understand global usage trends.

Posted by Philippa Hobbs Monday, March 15th, 2010

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A major intelligence gap exists in the industry today: what mobile subscribers are really doing on their Internet-enabled handsets. While we know that global mobile Internet user numbers are increasing, (according to Informa’s latest mobile Internet research, active users of mobile Internet services are expected to grow from 666 million at end-2009 to 878 million at end-2010), analysing global mobile Internet traffic trends by specific metrics is beset by challenges. A comparative analysis of several publicly released trend reports on mobile Internet traffic during 2009 (of varying timeframes) from a variety of companies shows some clear indicators of usage trends by device, content type and geography.

But analysis of global mobile Internet usage trends is tricky, not least due to the market’s fragmentation and the lack of comprehensive global data based on standard metrics. Different metrics are visible to different companies in the mobile content value chain – not only operators, but also mobile advertising networks, traffic management companies, analytics companies, mobile Internet gateway vendors, mobile Internet services vendors, DPI vendors, mobile content aggregators and more – whose breadth of visibility depends on their type of activity and geographical reach.

Comparing several sources of ‘global’ usage data unveils key differences that point to the inevitable bias of the sources themselves. Bringing together disparate sources under an umbrella of intelligent aggregation and normalisation would begin the process of overcoming such bias in traffic analysis and building a global picture of traffic trends that can be drilled down to the regional and market level, and enable more granular forecasting. At Informa, we have already begun to put this process in action. We invite companies with visibility of traffic to talk to us confidentially about collaborating in our ongoing research in this area.

Our early analysis confirms less-than-surprising mobile Internet consumption trends. Social networking on mobile has been cited as he most popular content type in reports from browser software vendor Opera and mobile Internet services vendor Novarra, among many others. This trend is further endorsed by the results of social network giant Facebook’s trial with UK operator Vodafone in 2009, announced last month at Mobile World Congress, the GSMA’s annual event, in which 20% of non-mobile-data subscribers given a week’s free trial of Facebook mobile upgraded to a data plan.

Consumption of mobile video content also appears to be undergoing significant growth, according to reports from mobile Internet services vendor Bytemobile and confirmed by a number of operators. Managing the consumption of mobile video content over finite network resources is proving a challenge for operators: Traffic management provider Allott Communications said in its latest mobile broadband traffic report released in the run up to MWC (relating to traffic from handsets and portable devices such as datacards and embedded modems) that ‘streaming video has become a mainstream medium and is the single most influential factor driving the need for increased network capacity’.

However, trends relating to growth of overall usage as well as device popularity sometimes vary from one report to another, often where there is a difference in the vendors’ regional reach. For example, in November 2009, there was a decline in total ad requests to the servers of global advertising networks Admob (whose key region is North America) and BuzzCity (whose key region is Asia-Pacific, but is growing in Europe), while one of their key competitors, InMobi, based in Asia but particularly active in Africa, was seeing consistently high growth. (Admob has since shown a recovery, notably due to growth in Asia.)

What’s more, the Apple iPhone, which is according to most Western-centric traffic reports and indeed most Western telecoms press the preferred device for accessing the mobile Internet, is upstaged by Nokia devices in Asia-Pacific- and Africa-centric- reports. Such reports show the Finnish device manufacturer’s overwhelming prevalence amongst users accessing the mobile Internet in less mature markets – a user base that is undergoing rapid growth. Even in those Western markets where smartphone adoption is higher, such as the US, smartphones actually generate only minority of mobile Internet traffic. Smartphone hype may be justified in terms of traffic volume per device, but the devices remain niche: to suggest that smartphones are the main generators of mobile Internet traffic is to ignore the ‘mass’ mobile Internet market.