Mobile-Data Crunch to Boost Cisco, Qualcomm

BOSTON (TheStreet) -- Mobile-data growth goes into overdrive next year as 4G and tiered pricing fuel greater consumer use. The first effects of the spectrum crunch likely becomes a reality with New York and San Francisco as the epicenters.

A year ago, I first tried to quantify the data tsunami that is challenging wireless operators. Nielsen, again, provided information to quantify the strength of the data tsunami.

So what has happened over the past year? Nationwide operators introduced their own flavor of tiered-data pricing. The blogosphere was vocal in its outrage and the average consumer continued to increase his data consumption with a voracious appetite. More importantly for investors, consumers do not seem to have a preference, as indicated by relatively unchanged net subscriber and churn metrics.

Not only has the ownership of smartphones dramatically increased, but usage has risen within every usage percentile by a factor of two or more. Smartphone owners at the 20th percentile are now using 27 MB of data per month, over three times more than the 8 MB they used in 2010, and 479 times more than in 2009. The median customer (50th percentile) used 160 MB in in this year's first quarter, up more than two-fold from 77 MB in 2010, and eight times more than in 2009.

We are seeing the most dramatic increases among the heaviest users. Usage at the 90th percentile increased to almost 1 GB in 2011, up by about a factor of two from 2010, and 4.5 times more than in 2009.

The distribution of total mobile data usage among smartphone owners has also changed. While the new tiered-data plans have introduced more fairness to data pricing and usage because low-usage customers no longer subsidize high-usage customers as they did under the "one size fits all" model, they have not stymied usage or skewed take-up.

Apple's(AAPL) iPhone was launched with Verizon Wireless(VZ) in February 2011 with an unlimited plan, whereas AT&T(T) continued to offer 200 MB and 2 GB data packages. Per-day sales, in the following 60 days, was almost identical for both operators, with about 40,000 each. This is even more remarkable because, in the first quarter, the top 5% of bandwidth users consumed 41.9% of all data consumed, whereas a year earlier, the top 5% consumed 43.6% of bandwidth.