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Google, Apple, and Amazon are pushing more and more of your entertainment, your data — heck, your life — into the cloud. But what’s it mean for the wireless network operators who are already struggling to keep up with heavy data demand?
Each of these companies recently announced new digital storage services for music. The idea is that people can put their music in the “cloud,” which is really a remote data center. The “cloud” becomes the central repository for all of your music, pictures, and other data. And you simply connect to it via any broadband connection available to access it.
There are plenty of benefits to this, of course. For one, it’s incredibly convenient, especially when you’re connecting wirelessly. As Apple CEO Steve Jobs pointed out during his keynote earlier this week where the iiCloud service was announced, he said that it will eliminate the headache of syncing each device.
But using these services will no doubt eat up a lot more bandwidth than just downloading a song one time to your computer or smartphone. Once music moves to the cloud, you could be downloading that same song every time you sync your device or even every time you listen to it. And once Apple or Google start offering video in the cloud, the problem may get even worse.
Can wireless networks, which are already buckling under the load of simple mobile browsing, handle it?
That’s the big question.
“The tonnage of traffic on the network is growing,” said Fared Adib, vice president of product development for Sprint Nextel. “That’s an issue we [wireless service providers] are dealing with. And I think it’s too early to say how the cloud services will affect all of us. As an industry, the ecosystem needs to work together on these issues.”
Heavy data loads
Indeed, wireless carriers are already feeling the pain of consumers’ increasing appetite for wireless data. AT&T has become the poster-child for carriers struggling to keep up with heavy loads. AT&T, which used to be the exclusive carrier for the iPhone, has said publicly that the company’s data traffic on its network has increased 8,000 percent over the past four years.
AT&T Chief Executive Randall Stephenson said at the Telecommunications Industry Association 2011 conference last month that by 2015, AT&T will handle as much wireless data in a month and a half as it did in all of 2010.
Stephenson said the only way to accommodate that kind of growth is to add more spectrum to its network. In addition to asking the Federal Communications Commission to open up more spectrum, AT&T also plans to spend $39 billion to buy T-Mobile USA to get access to more spectrum in dense urban areas, like New York City.
Without T-Mobile’s spectrum, AT&T has said that consumers will not see improvements in dropped calls, faster speed networks, or improved access to “state-of-the-art mobile broadband Internet service.”
While AT&T may be the most vocal right now about its network capacity constraints, there is growing data to suggest that other wireless operators will also be challenged in the future. Network equipment maker Cisco Systems said recently in a report that worldwide data traffic in 2010 just on mobile devices was three times all global Internet traffic in 2000.
Internet traffic in general is expected to quadruple over the next four years. And by 2015, Cisco estimates that the amount of traffic traversing the Internet will reach 966 exabytes per year. Between 2014 and 2015 network traffic is expected to grow by 200 exabytes, more than the total amount of Internet traffic generated worldwide in 2010.
A large contributor to this growth is a surge in network-connected devices. This includes everything from smartphones to notebooks to tablets to home appliances. On average, a U.S. consumer will likely have seven connected devices by 2015.
And if Apple, Google, and Amazon have their way, many of these consumers will be using cloud-based services to share their content among their multiple devices.
Working together
While it appears that Google, Apple, and Amazon may be on a collision course with wireless carriers, it’s in everyone’s best interest for the two sides to work together. And it seems like they are.
“The sense we’ve gotten from working with Google is that they get it,” said Sprint’s Adib. “They know we have to balance the traffic loads with the service they’re trying to offer. And the truth is none of us want the consumer to have a bad experience.”
Indeed at the e-G8 Forum in Paris last month, Google Executive Chairman Eric Schmidt said wireless operators and content companies are “incredibly co-dependent.” He added that the two groups can work together to spread out data demand to ensure these networks aren’t overloaded.
Using Wi-Fi to offload heavy traffic loads is one solution. The cloud services that have already been introduced rely heavily on Wi-Fi networks to provide the network connection between devices and the “cloud.”
“Doing the bulk of uploads via Wi-Fi will help alleviate some of the network issues,” said Ross Rubin, an analyst with NPD Group.
Sprint’s Adib agreed. He said that nearly 80 percent of mobile data usage on its network is done by subscribers at home or in the office, where Wi-Fi is typically available. He said that the company is working on ways to make discovering and connecting to these networks easier so that devices do it automatically and seamlessly. For now the company doesn’t have anything to announce, but it’s working with its device partners to come up with better solutions.
But Adib said concerns about “cloud” services may be slightly overblown. While it’s true consumers may be downloading or syncing content more frequently from their digital “lockers” in the cloud, he doesn’t believe people will stream content constantly.
“These cloud service are about making sure that people get access to their content on multiple devices,” he said. “And that’s a good thing for carriers. We want people using more than one device.”
In the end, carriers benefit from these new services, and companies such as Apple and Google also depend on the increasing capacity and reliability of wireless networks.
“There is no question that Google and Apple would like to treat bandwidth as unlimited,” said Charles Golvin an analyst with Forrester Research. “But carriers increasingly aren’t able to provide that. But neither one wants to frustrate consumers. So they must figure out a way to work together.”
