iPad set to fuel explosion in data traffic

US mobile data traffic is rocketing, according to analyst Chetan Sharma, who says it will hit one exabyte – a billion gigabytes – by the end of the year.

Sharma warns that the debut of the iPad and other connected devices could lead to an explosion in mobile data use, and that the government is unprepared.

“While 2010 started quite active on the regulatory front as the national broadband plan was unveiled in March little substantive progress has been made with regard to the spectrum, net-neutrality, and other broadband related issues,” he says.

“To start planning for 4G, 5G, and beyond, US should think about rolling a 50 year broadband plan. While more spectrum is always helpful, will we have all the spectrum we need in 2050? Or do we need to invent new technologies and business models that use spectrum more wisely?”

Sharma says the market rose seven percent quarter-on-quarter and 25 percent year-on-year during the third quarter. It’ll be worth more than $54 billion by the end of the year. The average data revenue per US user is $16.70 a month.

The reason, of course, is smartphones. Mobile penetration is now over 96 percent – and if you leave out the under-fives, who never have very much to say anyway, it tops 101 percent.

But connected devices such as the iPad are set to fuel growth even more, says Sharma. While they account for a measly three percent of revenues now, he says, in five years’ time they’ll be bringing in more money for operators than the entire pre-paid segment.

“Data traffic continued to increase across all networks,” says Sharma in the report.

“There are some superphones that are routinely average more than 1GB per month; superphones as a category is averaging 700 to 800MB per month. By the end of 2010, we expect the average US consumption to be approximately 325MB per month, up 112 percent from 2009.”