The implication of truly unlimited bandwidth for the users can have huge impacts on the network. We’ve seen the impact of iPlayer on Easynet (a 20% rise in bandwidth and rising), is that there needs to be investment in the underlying backbones to cope with the data.
Take a look at data on GSM, 4Kb/s speeds, now look at 3G about 2.5MBits/s and with HSDPA already being rolled out 14Mbits/s. Home broadband for most people if they are lucky is 6Mbits/s, So the impact is going to be huge as this Fierce Wireless posts states, Mobile broadband use up 154%.
Therefore the carrier has to invest huge sums in it’s backbone to cope with the hockey stick like impact of data traffic on it’s networks, while battling to retain revenue and market share where price is the only differential. Therefore the carriers see the only way to have any control over that bandwidth is to put a cap on it, so it’s unlimited*, where the asterisk points to a cap imposed by the carrier, usually either 1gb or 2gb. But is the cap only a short term stop gap to the bigger problem demanded by the market, of uncapped flat rate tariffs?
The Telco2.0 blog picked up the above diagram and highlight the unsustainability of the mobile broadband market, especially on flat-rate tariffs.
The presentations (from) Hamid Akhavan’s, CEO at T-Mobile International, seems to have been withdrawn from the site now. We managed to grab it before it was. The key image is below. It shows the economic unsustainability of mobile broadband, especially on flat-rate tariffs. If you understand that low quality YouTube videos now account for 10% of all global web traffic, then imagine what will happen when the quality improves. In fact you don’t need to imagine: see the real stats of the impact of the BBC’s iPlayer (high quality streaming video) on UK ISP’s in the last 8 weeks since launch (a doubling of streaming traffic and a trebling of costs – analysis here).
So T-Mobile, who may have now changed their mind, since they withdrew their presentation, seem to think that this path that we’re currently treading is unsustainable. When you look at some of the facts he may be right.