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Mobile-Network Traffic Growth Falls Short Amid Carrier Use Caps

Mobile-network traffic growth was hampered in North America and Western Europe last year as companies including AT&T Inc. and Vodafone Group Plc adopted pricing policies that discouraged heavy use, according to research by Cisco Systems Inc.

Mobile traffic in North America rose 64 percent in 2012, shy of the 70 percent projected a year ago by Cisco, according to a report released today. Western European traffic increased 44 percent, about half the 81 percent predicted pace, Arielle Sumits, a senior analyst at Cisco, said in an interview.

Traffic in these regions was affected after carriers imposed caps on usage and offered tiered pricing, charging more for large amounts of data. Slowing growth and reduced consumer spending in Europe also played a role there, according to Cisco.

“We see a little bit more regional variation this year,” Sumits said.

Mobile-service providers are using new price structures to help them better manage demands placed on wireless networks amid a surge in use of tablets and smartphones, said Thomas Barnett, Cisco’s director of service-provider thought leadership.

“The carriers are definitely looking for ways to maximize and optimize their infrastructure investment,” Barnett said in an interview.

Japan topped Cisco’s expectations. Its mobile traffic more than doubled, compared with 89 percent growth Cisco projected.

Wireless carriers’ capital expenditures will contract 7 percent to $98.6 billion this year, amid economic tumult and maturing network technology in Western Europe, according to ABI Research.

Mideast, Africa

Reduced spending on telecommunications gear has implications for equipment makers including Cisco, Alcatel-Lucent SA and Ericsson AB.

Western European mobile traffic will recover to a 50 percent annual growth rate through 2017, Cisco predicted. Driving the recovery will be the continued growth in the number of mobile devices used and the introduction of shared data plans, which make owning multiple mobile devices more convenient, Sumits said.

North America’s compound annual growth rate will continue to decelerate, to about 56 percent, Sumits said.

The Middle East and Africa will see compound annual traffic growth of 77 percent through 2017, Cisco said. The Asia-Pacific region will continue to enjoy mobile traffic growth averaging 76 percent annually, Cisco said.

Total worldwide mobile traffic will increase 13-fold in the next five years through 2017, at a compound annual rate of 66 percent, Cisco estimated.

The Cisco study used outside analyst reports as well as internal data.

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