Something's gotta give, on the all-you-can-eat, all-is-free concepts

I wanted to just make a quick comment on this. Many have been issuing warnings about the 'all you can eat' price plans and high data loads of ever power powerful smartphones on high speed mobile networks. Our very good friend Chetan Sharma (2x author including Wireless Broadband, so he really knows this stuff) just blogged again about how this cannot continue. The economics do not match up.

We have at one end, ever more powerful phones which now are also very comfortable to use for 'real internet' surfing on mobile. Take the iPhone - AT&T is now asking customers to surf less on it - isn't this totally backwards? AT&T is a mobile telecoms 'carrier' ie 'mobile operator' - its their BUSINESS to offer telecoms services and explicitly, the connectivity and bandwidth to let us consume telecoms services. Its like say a year ago, your operator had asked you to 'don't speak so much on the phone' because 'you are overloading our network' ... silly. We should be HAPPY that consumers are willing to put traffic on the network - and then - any intelligent business manager should - price the service accordingly. Don't give it for free..

So that is exactly what we now face. So suddenly consumers have (finally) excellent pocketable internet-access devices. And suddenly they have an insatiable appetite to consume services? Duh? If we tell them the use is 'unlimited' then thats what 'rational people' do - they put irrational amounts of traffic into the network - because it IS perceived as free.

Note that at the same time, while capacity of mobile (cellular) networks is improving, it is by no means improving fast enough to match the traffic growth - and all major radio technology scientists agree that it is physically impossible to make such improvements in the 'radio efficiency' of the spectrum. It is a limited resource. Think of it as the available parking space in a congested city like London. At some point, you have to do something about the congestion - and yes, congestion charging is the most 'logical' way to solve it.

Our mobile internet bandwidth issues will not go away, they will get worse. And that means, the 'all you can eat' and thus 'unlimited' price plans will disappear. Quite soon. And it may well be - as Verizon warned in the USA, that even the 'all you can eat' model for home fixed broadband will become more capped, with price plans and ranges etc..  Enjoy it while it lasts haha..

Comments

[JB]

This is a spurious assertion. The only constraint on mobile bandwith is tower density, if we can build broadband to the home, the network capacity is just sitting there waiting to be utilized. Post like these are strange in your overall context of $1,000,000,000,000.00 industry with super future fatastic phones in South Korea. Is it feast or famine? It can't be both.

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[Tom G.]

i totally agree. bandwidth is limited on cellular networks and the providers must (should!!) educate their customers to not waste bandwidth!
in germany, most (if not all) mobile broadband contracts offer unlimited data on the one hand. But on the other hand, bandwidth is cut down from 3.5G speeds to 2G once you reach a certain threshold (e.g. 5 GB/month). this pricing model should keep networks free from congestion until capacities increase (and the corresponding tarifs of course..) yes, bandwidth costs money.

it's a totally different story on fixed lines like DSL/cable as capacities are virtually unlimited (by fibre optics technology). nevertheless, it's still reasonable to apply limits even in this situation as bandwidth costs money as well. companies must make reasonable calculations. if they don't, it's them who have to pay the price in the end.

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