{"id":26955,"date":"2011-09-03T21:27:39","date_gmt":"2011-09-03T20:27:39","guid":{"rendered":"http:\/\/alienbabeltech.com\/main\/?p=26955"},"modified":"2011-09-03T21:28:43","modified_gmt":"2011-09-03T20:28:43","slug":"providers-work-to-profitably-meet-datavideo-bandwidth-demand","status":"publish","type":"post","link":"http:\/\/alienbabeltech.com\/main\/providers-work-to-profitably-meet-datavideo-bandwidth-demand\/","title":{"rendered":"Providers Work to Profitably Meet Data\/Video Bandwidth Demand"},"content":{"rendered":"
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The following is by G. A . “Andy” Marken, President of Marken Communications<\/span><\/a> Inc. He has kindly given us permission to republish his thought-provoking article. As with everything that we publish at AlienBabelTech, the opinions expressed are solely those of the individual writer and do not necessarily reflect the views and the opinions of the rest of the ABT staff.<\/strong><\/span><\/span> \u2013Mark Poppin,<\/span> ABT Senior Editor<\/span><\/span><\/strong><\/h6>\n<\/blockquote>\n

Traffic Jams<\/strong><\/p>\n

\"\"<\/a>\u201c<\/em><\/strong>We can teach these barbarians a lesson in Western methods and efficiency that will put them to shame.\u201d<\/em> \u2013 Col Nicholson, \u201cThe Bridge on the River Kwai<\/em>,\u201d Columbia Pictures (1957)<\/strong><\/p><\/blockquote>\n

Once upon a time there was a huge hue and cry over folks suffering from dropped mobile phone calls.\u00a0 You might remember those days like they were yesterday.<\/p>\n

Actually, the mobile people don\u2019t care about your calls.<\/p>\n

There\u2019s no money in that old-fashioned way of communicating.\u00a0 It takes so little bandwidth ($$$ to them), the meter dial hardly turns.<\/p>\n

Okay, that\u2019s not quite<\/em> true.\u00a0 One mobile phone isn\u2019t much; but globally, we\u2019ve surpassed five billion phones connected worldwide, according to CCS Insight.\u00a0 CCS Insight\u2019s Ben Wood noted that\u2019s more than three times as many PCs and a helluva\u2019 lot more than tablets and ereaders.<\/p>\n

Col Green looked over the changing landscape and said, \u201cAs I’ve told you before, in a job like yours, even when it’s finished, there’s always one more thing to do.\u201d<\/em><\/p>\n

The phone you don\u2019t go anywhere without could be the most prolific consumer device on the planet.<\/p>\n

They\u2019re Everywhere<\/strong><\/p>\n

The numbers are pretty amazing:<\/p>\n

–\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 Asia-Pacific, including India and China, has the most growth, accounting for 47 percent of the mobile connections last year.<\/p>\n

–\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 In Western Europe, mobile phone penetration has reached 130%.<\/p>\n

–\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 In Eastern Europe, overall penetration is 123%.<\/p>\n

–\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 Mobile penetration in Africa has reached 52%.<\/p>\n

More cheap feature phones are sold than smartphones; but if you saw Apple\u2019s quarterly earnings \u2013 and Samsung\u2019s, HTC\u2019s, Motorola\u2019s, etc. \u2013 the smartphone is like a rocket.<\/p>\n

North American Mobile Device Connections<\/strong><\/p>\n

\"\"<\/a>Phone Transition \u2013 <\/strong>Mobile phone activation has surpassed more than five billion.\u00a0 Feature phones are still the most widely sold devices globally (much less expensive); but in the U.S., users are rapidly converting to smartphones.\u00a0 Smartphones lead in activation in the Pacific Basin and are increasing at a slower pace in Europe.\u00a0 Source \u2013 Frost & Sullivan<\/strong><\/p><\/blockquote>\n

Look at our family\u2019s usage and the darn things are like a submarine to our budget!<\/p>\n

\"\"<\/a>Price Shift \u2013 <\/strong>\u201cAll you can eat\u201d plans offered by U.S. providers are slowly being replaced by tiered usage plans similar to those in the rest of the world.\u00a0 While many consumers find the bundled plans expensive, they are inexpensive compared to the cost outside of the U.S.\u00a0 The tiered plans will make sense for on-the-go business users because the quality of high-speed data communications will increase and be part of a company expense.\u00a0 The increases will come as a shock to people who want to enjoy video on-the-go.<\/p><\/blockquote>\n

It took the phone guys\/gals a long time to understand that there\u2019s a big difference between a three-minute call and 3MB download.<\/p>\n

After years of stringing wire and building towers, they discovered they weren\u2019t in the phone business but the information\/education\/entertainment business and that they could offer more to people (make more money) if they added data products, since people want to constantly be in touch.<\/p>\n

Connected Devices<\/strong><\/p>\n

\"\"<\/a>Multiple Devices \u2013 <\/strong>In addition to using their smartphones, users are now carrying multiple devices to meet their communications\/entertainment needs.\u00a0 However, for millennials, the smartphone will increasingly be the device they use to access the web.\u00a0 Source – IDC<\/strong><\/p><\/blockquote>\n

The netbook looked like a great addition (remember them?) but then the tablet appeared and users said, \u201cOMG this is what a mobile everything device is supposed to be!\u201d<\/em><\/p>\n

Sell the entertainment hungry public \u2013 video, music, games – a new device and BAM!!<\/em><\/strong> there\u2019s another data plan to sell.<\/p>\n

Change of Plans<\/strong><\/p>\n

That went over like a lead balloon in our house, so we went to The Box Store and got Wi-Fi units.<\/p>\n

Maj. Shears didn\u2019t like the offer either when he said, \u201cYou couldn’t be further from the truth!\u201d<\/em><\/p>\n

According to IDC\u2019s Bob O\u2019Donnell, our decision wasn\u2019t unusual and that a data plan for every device you carry is ridiculous.<\/p>\n

Wi-Fi is available for notebook\/tablet 90 percent of the time \u2026 at least around here it is.<\/p>\n

Who needs to use their 3G\/4G wireless service?<\/p>\n

Not at that price!<\/p>\n

As Col Nicholson said, \u201cI tell you, gentlemen, we have a problem on our hands.\u201d<\/em><\/p>\n

The mobile people got the message and it won\u2019t be long that you\u2019ll be offered a sweet big bucket plan regardless of the device you\u2019re using.<\/p>\n

Even though folks will like the idea of that flexibility, Pew Research recently reported that 42 percent of 18-to-29-year-old smartphone owners use them mostly for web access,<\/p>\n

Distribution of Mobile Data Traffic\u2014by Category<\/strong><\/p>\n

\"\"<\/a>Mobile Data Traffic \u2013 <\/strong>Around the globe, carriers have seen a significant and steadily growing move from calls to data communications.\u00a0 By 2015, Cisco projects 66% of the mobile data traffic will be video.\u00a0 Source – CiscoVNI<\/strong><\/p><\/blockquote>\n

In addition to web surfing, folks are using these little suckers for email, listening to Pandora, watching the Hawaii 5-0 and Bones shows they missed, checking dumb, dumber YouTube shows.<\/p>\n

The fact that a smartphone has phone as part of its name is becoming almost incidental because now what they carry \u2013 and use \u2013 is a mobile data device.<\/p>\n

Cisco reported that mobile data traffic will double every year through 2014 worldwide.<\/p>\n

Bandwidth Supply<\/strong><\/p>\n

Bytemobile, which monitors\/sells to service providers worldwide, says the mix of data traffic is consistent across all geographic areas, including \u00a0Europe which has the most avid video users.\u00a0 They say the average video consumption will be 43 percent of the traffic.<\/p>\n

Watching the movie Maj. Shears commented, \u201c<\/em>The only important thing is how to live like a human being.\u201d<\/em><\/p>\n

\"\"<\/a>Worldwide Traffic \u2013 <\/strong>The mix of data traffic is consistent across all geographies with video becoming the dominant form.\u00a0 Europeans are the most avid video users while web browsing dominates in Asia.\u00a0 Source – Bytemobile<\/strong><\/p><\/blockquote>\n

The impact of data \u2013 and specifically video \u2013 is one of the reasons AT&T wants T-Mobile.\u00a0 Not for the subscribers (O.K., that will be nice), but for the infrastructure that\u2019s already in place and can be beefed up to higher-performance LTE (Long Term Evolution).<\/p>\n

Then they, and the rest of the providers,\u00a0 can quit market spinning 3G+, 4G, better than 4G and can start delivering real bandwidth (and yes, they\u2019ll put up more towers as rapidly as they can wade through local\/regional red tape).<\/p>\n

Of course, it isn\u2019t that simple because they need to optimize the video and data for transmission.<\/p>\n

Referring to the \u201copportunity\u201d Col. Saito said, \u201c<\/em>All work and no play make Jack a dull boy.\u201d<\/em><\/p>\n

U.S. Mobile Video\/TV Users<\/strong><\/p>\n

\"\"<\/a>Entertainment On-the-Go \u2013 <\/strong>The demand for mobile video\/TV consumption will grow steadily over the next few years.\u00a0 By 2014, Yankee Group projects there will be more than450 million viewers.\u00a0 Source \u2013 Yankee Group<\/strong><\/p><\/blockquote>\n

The biggest challenge is just having a big enough digital wireless network.<\/p>\n

Right now, we\u2019re on the verge of swamping the wireless networks:<\/p>\n

–\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 Mobile networks in North America are filled to 80 percent of capacity<\/p>\n

–\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 Global networks in other regions are utilized more than 65 percent<\/p>\n

–\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 23 percent of base stations worldwide had capacity constraints<\/p>\n

–\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 Latin America’s mobile networks will hit 85 percent average utilization within a year<\/p>\n

The European Union has a solution none of the big providers like — the creation of high-speed fiber networks that operate like utilities and are open to their telecom competitors.<\/p>\n

No one is making that kind of suggestion in the Americas…nope.<\/p>\n

Shapiro\u2019s Solution<\/strong><\/p>\n

CEA\u2019s Gary Shapiro is too smart to put forward an idea like that which would tick off way too many deep-pocketed folks.<\/p>\n

Naw\u2026the broadcast folks have bandwidth they aren\u2019t using right (and hey, folks are using the other pipes) so he\u2019s pestering Capitol Hill to sell off all that excess bandwidth to mobile folks.<\/p>\n

Rationale?<\/p>\n

–\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 It will put billions back in the government coffers<\/p>\n

–\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 Mobile is the way people are going<\/p>\n

–\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 New technologies that will use the bandwidth more efficiently will be used<\/p>\n

–\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 The build-out will stimulate the economy<\/p>\n

–\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 It will put billions in government coffers<\/p>\n

Imagine the cable folks as Brits as you recall Col Saito\u2019s frustration, \u201c<\/em>I hate the British! You are defeated but you have no shame. You are stubborn but you have no pride. You endure but you have no courage. I hate the British!\u201d<\/em><\/p>\n

\"\"<\/a><\/p>\n

Phone folks (and Shapiro\u2019s device-producing members) like the idea so they\u2019ve \u00a0said they\u2019re going to do what they can to optimize video for you.<\/p>\n

Oh and BTW, you probably heard the \u201call you can eat\u201d plans are being retired.<\/p>\n

Monthly Smartphone Wireless Data Plan Pricing<\/strong><\/p>\n

\"\"<\/a>New Plan Balloons \u2013 <\/strong>All of the U.S. carriers have announced (or semi-announced) new capacity usage plans for consumers.\u00a0 At this point, none are set in concrete and they will change over the next year as carriers strengthen\/expand their networks and figure out the best plan structure for all concerned.\u00a0\u00a0 Source \u2013 Barclay Capital, reports<\/strong><\/p><\/blockquote>\n

There\u2019s no money in fixed-pricing and the carriers can make more by charging the heavy data users (like our kids).<\/p>\n

Maj. Clipton heard the news and said, \u201c<\/em>Madness! Madness!\u201d<\/em><\/p>\n

Don\u2019t get your shorts in a knot!\u00a0 Carriers say that 10 percent of the smartphone users are the data gluttons and most folks will \u201chardly\u201d notice.<\/p>\n

Since the carriers aren\u2019t sure where your pain threshold is yet, you\u2019ll see a lot of pricing experimentation with different speed tiers, switching traffic between 4G and 3G networks, different levels of video quality.<\/p>\n

Don\u2019t worry, they\u2019ll work it out so you\u2019ll kinda\u2019 like it and they\u2019ll love it.<\/p>\n

It\u2019ll be a beautiful toll bridge when everyone is done\u2026wait and see.<\/strong><\/p>\n

As Col Saito said, \u201cBe happy in your work.\u201d<\/em><\/p>\n

# # #<\/p>\n

by: G.A. “Andy” Marken<\/strong><\/p>\n

President<\/strong><\/p>\n

Marken Communications Inc.<\/strong><\/p>\n

Andy@markencom.com<\/a><\/strong><\/p>\n

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