November 01, 2010, 5:07 PM — Smartphone use is growing so fast, carriers are having to spend 41 percent more on backhaul than last year.
U.S. businesses may only have increased their spending on wireline Internet by 2 percent since last year, but mobile carriers will increase spending on the network segments connecting cell towers to the network backbone by as much as 41 percent by 2014, according to a report from analyst firm In-Stat.
AT&T led the push shifting $5 to $7 billion in development funds to its wireless network and the backhaul links that support it, rather than to its core wired network, to keep up with network demand from the almost-disastrously successful iPhone and user complaints that came along with it.
Other carriers are having to rush to catch up, including Verizon Wireless, which has championed the next-generation LTE 4G network protocol over WiMax, which seems to be declining, despite early support from Sprint and AT&T.
The problem, which is forcing carriers to upgrade their leased lines, cell-tower gear, routers and gateways in branch stations, is the increasing volume of mobile traffic, both in number of connections and bandwidth demand per connection, another In-Stat report found. The market for mobile video calling may grow as large as $1 billion by 2015 -- and a data volume of more than 9 petabytes in North America alone, especially following the launch of iPhone 4 with Facetime video capability, not to mention Fring, OoVoo, Qik and Skype, the report said.
By 2014, three quarters of mobile processors will be multicore, more than that will have integrated baseband modems, and tablets with cell-network connections will grow at 123 percent per year, yet another In-Stat report predicted.
Put them all together and it looks as if in a couple of years there will be more computing power and network use on the hoof than in the cubicle.