Mobile Broadband Prices: As Usage Climbs, Something's Gotta Give

Sooner or later, mobile broadband consumption patterns are going to force mobile Internet service providers to better match consumption with usage, for the simple reason that the cost of supplying end user bandwidth probably will grow faster than the cost of infrastructure, on a per-megabit-per-second basis, will drop.

That obviously affects the mobile broadband business case, especially if video comes to represent 90 percent of all bandwidth demand, as Cisco now predicts and as global backbone networks already demonstrate.

At the current average traffic levels of 500 MBytes a month, revenue per MByte outstrips delivery costs for HSPA, LTE and WiMAX at monthly retail prices starting at $20 per month, says Monica Paolini, Senza Fili Consulting president.

At $20 per month, mobile operators operate at a loss for subscribers using more than 1 GByte per month in a 3G network, or for subscribers using more than 5 GBytes per month on a 4G network, Paolini says.

At 10 GBytes per month, data subscribers do not generate any net benefit for mobile operators on a 3G network. On a 4G network 10 GBytes of usage might be a break-even proposition.