By Randy Fuller

Global mobile data traffic has surpassed voice to become the new king of the mobile industry, and based on projections by industry analysts, there’s no slow down in sight. Coda Research predicts a 40-fold increase in the amount of data traffic carried over cellular networks in the next five years. If ABI Research is on the mark, the number of mobile broadband users will surpass 1.5 billion by 2015.

Carriers around the world are reporting large increases in revenue from data services, driven in large part by mobile internet access using smartphones, netbooks and tablet PCs. At airports, in coffee shops, in automobiles and home offices, millions of untethered devices are connected to a growing range of networks that deliver broadband data

content and services once confined to the fixed-line world. Broadband has been liberated from its wireline leash, and consumers are increasingly free to surf, roam, communicate, watch and play from just about anywhere. Perhaps the best example of the impact of data growth on operators’ revenue comes from Vodafone Group, which reported organic revenue growth of 25 percent for its data services for Q4 ‘08, while the organic growth of voice and messaging revenue remained flat. Clearly, mobile broadband will power the next phase of growth for the mobile industry.

The data opportunity doesn’t come without its challenges. Bandwidth cost per subscriber for voice and messaging traffic is well understood, but the same can’t be said for data. The amount of bandwidth consumed by different applications can vary dramatically. A text e-mail sent from a smartphone may use only one or two kilobytes (KB) of data with no stringent latency requirements, while downloading a Web page can consume 500 KB or more. And, video services can easily devour megabytes if not gigabytes of data with latency a key quality concern. Coda estimates that if the carriers froze their networks today, they would reach 100 percent utilization at peak

The growing number of mobile broadband users coupled with increasing bandwidth per user is creating a dilemma for operators: bandwidth capacity needs are outpacing the associated revenue. Industry analyst firm, Heavy Reading, estimates that bandwidth on 3G networks is growing at a rate of approximately 400 percent annually, while the associated revenue from data services is only growing by approximately 40 percent per year. Simply put, operators will be carrying more data per user for less revenue. As the traffic levels swell, operators are realizing that neither economics nor delivery architectures are keeping pace with the escalating demand for mobile broadband access.

Faced with increasing broadband penetration, operators are looking to 4G technologies like long term evolution (LTE) to grow capacity and optimize their network architecture for data-enabled devices and applications. LTE, defined by the 3rd Generation Partnership Project (3GPP) in Release 8 standards and extended in Release 9, is an evolution of universal mobile telecommunications system (UMTS) technology.