There's a couple of charts on mobile broadband that I'm now heartily sick of seeing:
1) The "diverging curves" chart, with data traffic rising exponentially, and revenue only growing anaemically, if at all.
2) The "comparative $ per GB" for LTE vs. HSPA and so forth.
The first one made an interesting point and observation about two years ago, but is now well past its sell-by date. In particular, it always gets positioned as a "problem statement" when it's just an illustration.
I don't think I've ever heard a compelling argument for why it's actually an issue - not least because a similar chart is possible for virtually every technology industry out there. Imagine a similar chart of "computer processing cycles" vs. revenue spent on silicon chips. Or "packets processed" vs. router revenues. Or flight passenger-miles vs. airfares, and so forth.
Not only that, but it encapsulates price elasticity - average price goes down, so average usage goes up. Surprising?
A much more useful chart would be one which directly links weak revenue growth to stronger growth in costs for the operators (ideally combining aspects of capex + opex).
The problem is that the measure of mobile broadband by "tonnage" (ie GB of data) had become the single over-riding metric used by much of the industry, certainly in public. Sure, much more subtle calculations are used by the people who actually have to dimension and build the infrastructure, but the public persona of the "evil Gigabyte of traffic" as the key culprit dragging down the industry has a wide and damaging impact elsewhere.
Policymakers, marketers, vendors and investors often gloss over the details - and their opinions often have knock-on impacts based on this simplistic and often-meaningless analysis. .
In particular, I see a risk that the "tonnage" argument is used spuriously in debates about Net Neutrality or other aspects of competition and regulatory affairs. That chart is a lobbyist's dream if used effectively - never mind if the message and true chain of causality get a bit blurred? It's a pretty good tool for "educating" users with simple messages about pricing and tiering, too. Only yesterday, I saw a presentation from a very well-known strategy consulting firm that pursued exactly this line of debate, with highly questionable conclusions and assertions
Given that we already know that the real problems are often to do with busy hour / busy cell issues, signalling load, rather than tonnage - or uplink rather than downlink load - the trite comments about "20% of users consuming 80% of the capacity" are not meaningful.
On the other hand, if there was a way to prove that "20% of users are causing 80% of the problems, and driving 80% of the extra costs", that would be a very different - and much more compelling - story. But at the moment, the diverging-curves chart is simply an exercise in non-sequiturs.
(On a related topic - if you use the chart to assert that traffic should always be proportional to revenues, aren't you also just implicitly arguing that SMS prices should really be cut by 99.9% to fit your neat desired pattern?)
The fact is that the cost side of the equation for mobile broadband is very, very complex - which is why the second chart is misleading too. Yes, I absolutely agree that LTE can squeeze more bits per Hz per cell across the network, which makes it much more efficient than older WCDMA deployments - but surely, the baseline for most of today's MBB is using R5 or R6 or R7 HSPA? And yes, the flatter IP architecture should also be cheaper.
But then there's the question of whether we're talking about deploying LTE in 5, 10 or 20MHz channel widths, which spectrum band it's going to be used in, whether it can use the existing cell-site grid, whether it costs extra to have an overlay on top of the old 3G networks, and of course any incremental costs of devices, testing and so forth.
It's not much use having a chart which essentially says "all other things being equal....", when in the real world they're patently not equal. It's the same as arguing that hydrogen-powered cars are much more efficient than petrol, but conveniently forgetting about the infrastructure required to support it, or what to do with the rather large legacy installed base.
Not to mention, of course, that it again uses the mythical Gigabyte as the arbiter of all things to do with broadband economics. No mention, once again, of signalling, offload, spectrum, up/downlink and so forth. No consideration of any additional costs for supporting voice as well as data.
Plus, I'm pretty sure it's the same chart I've seen recycled through about 17 iterations, with little clarity on the original source, or how old it it. I think it pre-dates most of the discussion around small cells, SIPTO and various other innovations - and quite possibly also comes from before the finding that things like fast dormancy and RNC load are often limiting factors for smartphone-heavy networks.
If freight companies bought vehicles based on "tonnage", then a small container ship would cost more than a Boeing 747. There is very little rationale for telecom networks to be based on such a narrow metric either.
To me, the fact that these two charts are repeated almost as mantras points to this being another "tyranny of consensus". Obviously, tonnage measured in GB is an easy metric for the industry and end-users to understand. But that doesn't mean it's the right one.
Speaking Engagements & Private Workshops - Get Dean Bubley to present or chair your event
Need an experienced, provocative & influential telecoms keynote speaker, moderator/chair or workshop facilitator?
To discuss Dean Bubley's appearance at a specific event, contact information AT disruptive-analysis DOT com