Time to Face Apple’s Bandwidth-Hogging App Facetime

Rajesh is a member of The Motley Fool Blog Network -- entries represent the personal opinion of the blogger and are not formally edited.

Apple (NASDAQ: AAPL) proposes to bring its popular FaceTime, the video calling application on cellular networks, along with the launch of its iOS 6. This is going to put several questions in front of the carriers as well as the users. The video chat service is going to gobble up chunks of data.

It might be good news for the wireless providers who have another way of boosting their revenue with increases in data usage. On the contrary, users need to be careful about using the bandwidth-hogging FaceTime video App. However, the video chat, which is soon going to run over carrier’s wireless networks, will make it much easier for people to make video call anywhere they want.

The concern over bandwidth
ication was introduced in 2010 with the launch of iPhone 4. It allowed people with iOS devices to interact through video calls which only worked on the Wi-Fi networks. The reason is that carriers like AT&T (NYSE: T) were apprehensive that the app would overuse their already burdened 3G wireless network.

Even now that the FaceTime chat service is coming on the cellular network, the concern remains unchanged. It is important for the users particularly with capped data plans to keep a check on their usage of this application which eats up chunks of data. For users who have opted Verizon’s (NYSE: VZ) single gigabyte data plan will easily exceed the data allotment only if they make a five minute call on the FaceTime every day. Regular users should select their data plan such that they manage to keep within the allotted data limit, else be ready to shell out extra from their pockets.

FaceTime gives the flexibility of using variable bandwidth and adjust to the accessible connection speed. It is because of this that the picture quality varies. The way the app currently runs on the Wi-Fi suggests that it would consume 1.5 to 7.5 megabytes per minute. This is approximately 11 hours of talk time from one gigabyte of data use at the minimum rate and 2 hours and 15 minutes at the highest rate.

The video app which is to run on 4G networks would operate at the highest rate, using up maximum data. This is precisely why this application was restricted until now to operate on the cellular network. Apple’s FaceTime community alone could have a considerable impact on the data usage for the wireless operators. Though Microsoft (NASDAQ: MSFT) doesn’t share user statistics for its mobile applications, FaceTime is estimated to have a larger base for its video calling app compared to Microsoft’s Skype.

Things getting pricier for users
FaceTime, which is soon going to run on the cellular network, comes with such announcement at the time Verizon is reshuffling its data plans which focuses on data usage making it pricier for heavy data users. AT&T is expected to follow its bigger rival and come up with something similar soon. On the other hand, Sprint (NYSE: S) as of now remains committed to its unlimited data plan. However, it won’t take time to join the Verizon and AT&T league.

Carriers are yet to comment on their plans regarding FaceTime. Only AT&T responded saying that it is closely coordinating with Apple on the iOS 6 feature and would reveal more information when the release date gets closer.

My takeaway
FaceTime will soak a considerable amount of bandwidth. People might opt to make video calls from areas that have Wi-Fi coverage, to avoid using up data in order to stay within the limits of their data plans. What needs to be seen is how will the carriers deal with the new functionality and what impact the app will have on their network. Also, it will be interesting to see how subscribers react to this, especially at a time when the big ones are shifting to new data plans only to make things costlier for the users.

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