Monday, October 15, 2012

LTE Will be Used as a Subsitute for Fixed Service, In Many Cases

Though for the most part mobile voice services have been viewed as complementary to fixed voice, at least some providers have taken a direct "replacement" tack with their marketing. And that is likely to become more prevalent over time, as Long Term Evolution networks become more prevalent.

The classic historic example of a service marketed as an alternative to fixed line service is Cricket Wireless, which marketed itself as a local calling substitute for landline voice service, for more than a decade.

Since many observers have noted that a 4G wireless service might be a substitute for a fixed broadband connection, one wonders when, and if, one or more providers will try and carve out a niche for 4G as a "wireline replacement" service.

Clearwire has been the best example of that, up to this point. But Verizon Wireless clearly believes its Long Term Evolution network might be used in that way. Also, new provider FreedomPop also plans to introduce a fixed access alternative, to complement its new mobile broadband service.

Wireless likely will not be so workable a replacement for multi-person households and households that watch lots of online video. But 4G wireless might be a perfectly workable, or at least workable solution for single-person households, or households with unrelated persons, typically younger, who use about an average amount of data each month.

Some estimates peg "average" household consumption per month at about 12 gigabytes. But that is misleading. The "mean" or "average" includes consumption by very-heavy users who are a minority of all users. The "median" gives a better sense for "typical" usage.

According to Sandvine , for example, the median North American user consumed about four Gbytes on a fixed connection, monthly. If that remains roughly the case, then wireless is going to be a viable substitute product, for many.

To be sure, consumption tends to grow over time. But current typical consumption is not all that intensive.

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