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Uh oh! Expect to see the cost of wireless data skyrocket

In addition to Ericsson’s forecast of inadequate capacity, the base cost of data backhaul from cellular is astronomical. A fix is needed or we will all be paying through the nose.

Ericsson: Wireless networks aren’t ready for the smartphone revolution

ON NOVEMBER 11, 2013
Ericsson today released its quarterly Mobility Report, an in-depth study meant to identify and quantify the major trends in mobile device usage. It confirms what many have long suspected. Smartphones are more popular than they were just a few months ago. China is one of the most important mobile markets in the world. Reaching another billion consumers will take less time than reaching the first billion. The instincts of many reporters and pundits have now been sufficiently measured, projected, and published in a handy-dandy PDF.
There is one aspect of the report that might surprise some readers, however. Ericsson says that the rate at which smartphone owners use wireless data connections will grow much faster than the rate at which people are buying new smartphones. The report says that the smartphone market is likely to triple by 2019; the amount of data used by smartphone owners is expected to grow tenfold in the same time period. That’s where things get interesting.
Ericsson expects much of this data — more than 50 percent — to be consumed by streaming videos. The problem: many cities don’t boast wireless coverage strong enough to support such streaming. Only two cities (Copenhagen and Oslo) regularly offered a strong enough connection to offer the stutter-free streaming experience many consumers might expect from these apps. Other cities could handle less data-intensive tasks, and could certainly create public WiFi hotspots capable of handling the strain, but other networks simply aren’t yet up to the task.
That’s where companies like Onavo, which Facebook recently bought for “about $120 million,” might come in. Onavo’s data compression software makes it easier for companies to reach consumers with poor Internet connections. “We expect Onavo’s data compression technology to play a central role in our mission to connect more people to the internet, and their analytic tools will help us provide better, more efficient mobile products,” a Facebook spokeswoman told Reuters when the acquisition was announced. Facebook wants to reach another billion people, and it’s going to have to solve or mitigate this data problem in order to do so.
But the technologies that allow people to use increasingly data-intensive services won’t just be for the next billion people to join the Internet. They’re likely to become more important in developed countries, too — especially if the current state of broadband in countries like the US remains dire. Wireless networks are becoming easier to access even as they best the speed of their broadband counterparts, and some companies, like FreedomPop, are trying to convince consumers that wireless data has gotten so good that they probably don’t even need a broadband connection.
The rise of smartphones isn’t a surprise. Neither is the idea that a country with 1 billion citizens will prove integral to its continuation. But the increasing requirements of people who are using their smartphones more than ever before, combined with the increased number of people purchasing smartphones for the first time, might surprise those who wonder about just how important these devices might become to our daily lives.
Getting the next billion people onto the Internet will be hard. Supporting all of ‘em once they’re here will be even harder.

Post Author: David Mayes

Founder, Mayo615 Technology Partners Ltd., UBC adjunct faculty, Intel alumnus, technology assessment, international business, cleantech, fly fisherman, native Californian and citizen of France, who has been very fortunate to have traveled, lived and worked all over the globe. My wonderful wife, Isabelle has reintroduced me to my French Provençal heritage.

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