Comments about cultural trends, mobile business, eCommerce and Internet developments

Recently I had several discussions with telco operators and experts about the future of fixed broadband, the importance of wireless spectrum and the future of mobile broadband.

Let’s start with a consumer question instead of having the telco engineers doing their pitch: “How much bandwidth do I possibly need?” 3Mbs? 10Mbs? 50Mbs? 100Mbs? or more? for what? which applications?

Probably the most bandwidth intensive application that we can today think of is video or better high definition video, after  the electronics industry convinced us (by the way, how did they do that?) that we need Blue-ray DVD players and have to buy HDTV.

Until now telecommunication companies complained that P2P file sharing is filling up their networks. But now we have Spotify and there is no need anymore to download music. Tomorrow we will have Videofy (the legal version of Spotify for Video) and we will stream our high-definition movies, TV shows to our laptops, TVs and smartphones.

Streaming high-definition video is as much bandwidth as we probably need for the next years. You can do that today over mobile broadband 3,6Mbs (or higher) as long as the mobile operators guarantee a minimum quality of service. What do we do with the 50Mbs that fixed operators are selling us? the typical argument I get is “If you have a family every memeber will want to watch somethign different”.

If we need 10, 50 or 100Mbs, mobile broadband will be able to deliver this within short period of time, probably faster than movie labels and TV producers can agree to license their content.

Mobile broadband is kept artificially expensive by the big operators (e.g. 25€ per month w/o VAT for 1 GB) in order to not endanger their high-margin fixed-line adsl business (flat-rates in Spain of 30€ per month (w/o VAT) in addition to the regular telephone line). Looking again to more competitive markets with pure mobile-only players, we see mobile broadband flat-rate offers for 25€ per month (VAT included) from Drei in Austria. In Spain only MVNOs with 25€ (w/o VAT) for 5 GB offer real fixed broadband (adsl) substitution.

In countries like Austria and the Nordics mobile broadband has already a share of more than 30% of all broadband connections. In Denmark 5 out of 6 new broadband customers choose mobile vs. fixed !! (see also “Who decides what the future broadband market will look like?” from John Strand)

Engineers will now tell you that current mobile infrastructure could not support all this traffic. Yes, but upgrading wireless infrastructure should be cheaper and more flexible than putting in place fibre. And, so far Moore’s law has proven to be even more valid for broadband speed and capacity than it has been for computing and storage chips. Technology evolves typically faster than consumer usage adoption. Even so the increase in demand for mobile broadband has been the biggest growth story of the last years by far.

Probably fixed broadband and wifi will not be dead, but let’s hope for more competition in the Spanish broadband market to bring high prices down and allow Spanish consumers to access the Internet at more reasonable prices, like in other European countries and so close the gap in Internet usage and eCommerce.