Friday, June 11, 2010

O2's decision to scrap unlimited data underscores mobile broadband limitations


The reports on BBC News and in the FT (O2 scraps unlimited data for smartphones) hardly come as a surprise, but they do further underline the limitations of current mobile broadband services - they're now a significant constraint on smartphone functionality.

The BBC's Rory Cellan-Jones made a similar point in his blog earlier this week, that mobile broadband providers and smartphone manufacturers are increasingly out of step with each other, with the mobile broadband providers trailing behind: "the technology on the phones is still moving ahead faster than the networks on which they run". He also made an important related point about providers' lack of transparency and honesty about their coverage:
"What makes it even worse is that the networks still give very patchy information about their coverage. I have just checked a place near my home where I know that one network's coverage is extremely poor - and its map tells me that it's of a high quality, good enough for video calls."
It may well currently be the case that "the majority of users will be comfortably served by 500MB of data per month", that "O2 expects only 3% of its 21.4m customers to have to pay additional charges because they breach the data usage caps" and that "3% (of users) are using something like 36% of the data capacity of O2's network". This is what O2's press release had to say:
"Based on current usage patterns, 97% of O2 customers would not need to buy additional data allowances, as the lowest bundle (500MB) provides at least 2.5 times the average O2 customer's current use."
But how long will it be before more and more users start to consume the same amount of mobile data as that 3%? Not that long would be my guess.

Update 18 June 2010: an interesting article in the FT (Mobile networks: The race is on to keep the data flowing) includes some useful commentary from Ed Marsden, partner in the tele­communications practice at Deloitte:
“There are three main problems. The first is the volume of devices using the network. There are now 600m mobile broadband connections, and smartphones have overtaken PCs. The second factor is how consumers are using these devices. With ‘all you can eat’ data plans, we’ve gone from under-utilisation to congestion. One large US operator has identified a 5,000 per cent increase in data growth in the past three years. The third is our level of understanding of, and the optimisation of, networks. Some smartphones strain the network: they generate eight times the signal load of a mobile broadband [dongle] connection. It’s about understanding how the network is being used and where the pinch-points are.”
The same article suggests the future looks bleak:
"At the network level, some operators are pinning their hopes on a move to a fourth-generation technology known as Long Term Evolution, or LTE, which promises more efficient use of the radio spectrum, especially for data traffic. The greater spectrum range should allow more users to connect at maximum bandwidth at the same time. Even vendors of fourth-generation equipment, however, acknowledge that LTE might be too little and too late to solve the network capacity problem."

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