The Mobile Internet Report Key Themes*

Aggregate Mobile Data Network Supply
Can Meet Surging Demand
2008E 2009E 2010E 2011E 2012E 2013E
N. America Mobile Subscribers (MM) 243 271 289 301 312 322
N. America Total Cell Sites 253,514 270,537 286,825 303,325 319,825 336,325
Backhaul Lines (T1s) per Cell Site 4 4 4 4 4 4
T1 Capacity (Mbit/s) 1.5 1.5 1.5 1.5 1.5 1.5
Total Seconds in a Year 31,104,000 31,104,000 31,104,000 31,104,000 31,104,000 31,104,000
N. America Aggregate Capacity (TB/yr) 5,913,968 6,311,094 6,691,054 7,075,966 7,460,878 7,845,790
N. America Mobile Data Usage (TB/yr) 75,709 205,175 492,071 1,091,319 2,419,467 4,777,125
Data Usage per Sub per Month (MB/mo) 26 63 142 302 646 1,235
N. America Mobile Voice Usage (TB/yr) 145,177 162,372 172,769 180,165 186,729 192,852
Voice Usage per Sub per Month (MB/mo) 50 50 50 50 50 50
N. America Voice and Data Usage (TB/yr) 220,886 367,547 664,839 1,271,484 2,606,196 4,969,977
THEORETICAL Utilization Rate 4% 6% 10% 18% 35% 63%
• Yes, aggregate supply in North America - assuming capacity of 4 T1s or 6 Mbps per cell site - will be able to
handle aggregate demand well through 2013 without any upgrades to the network.
• However, this is an incorrect way of determining whether aggregate cell sites will be able to cope with the
surging demand. Not every cell site is created equal. A Times Square cell site does not equal a rural cell site.
• Aggregate supply would include down times, like night time, because the cell sites still are pumping out
capacity every second. Even if you adjust the annual seconds and remove 12 hours per day, aggregate
supply will still be able to meet demand without any upgrades through 2012E.
• What is the correct way to analyze demand vs. supply and how will the carriers manage this
Note: Aggregate capacity equation: (Total cell sites) * (T1s per cell site * T1 capacity) / (8 bits per Byte) * (Seconds per year) /
1MM. Theoretical utilization assumes usage equally spread out in 24 hours everyday.
Source: Simon Flannery, Morgan Stanley Research estimates.
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