How Does Network Density Affect Old Debate About Use of Wi-Fi as a Rival Access Platform?

Time and Moore’s Law can change the strategic context within which decisions about business strategy are made.

Many note how the cost to start an app company have declined by an order of magnitude or more since the turn of the century, a direct reflection of Moore’s Law improvements as well as the commercialization of cloud computing platforms. Since 1992, for example, the cost of computing or storage has declined by five orders of magnitude.

That means the information technology cost to create a startup is easily an order of magnitude or even two orders of magnitude less than it was in 2000. Granted, IT costs are only part of the cost of creating a company and building its products.

The point is that, for a variety of reasons, app development has been democratized by cloud computing, Moore’s Law and widespread consumer use of cloud-based apps.

In a similar way, thinking about how to use mobile networks and Wi-Fi networks to support mobile services have changed, and will change more as new spectrum is released to support Internet usage, and as access methods broaden.

Broadly speaking, we have been debating for decades whether Wi-Fi can be an effective substitute for mobile network access, and under what conditions.

But Moore’s Law, new spectrum and new access methods continue to change the context. Put simply, all the trends point to denser wireless access networks, whether mobile or untethered (Wi-Fi).

Denser networks mean the value of platforms also changes. But both mobile and Wi-Fi networks are becoming more dense.

So even if denser Wi-Fi means a better ability to satisfy a wider range of connectivity needs, mobile networks also are becoming more dense, potentially obviating the value of using Wi-Fi, from an end user perspective.

Also, as it becomes easier for mobile network bandwidth to be bonded with Wi-Fi, the value of both networks will tend to rise, in tandem. In other words, better Wi-Fi means better mobile access. But it might not be the case that better mobile networks mean one-for-one increases in the value of Wi-Fi.

Higher frequencies for mobile access (millimeter wave, for example) mean mobile networks will be denser.

That very density, plus the bandwidth gains (higher frequencies carry more bits, because they have more Hertz), mean Wi-Fi is helpful, but less useful as a complete alternative access platform.

It remains unclear how network densification affects the value of Wi-Fi as a rival access platform, compared to mobile. Arguably, mobile operators will be able to monetize Wi-Fi easier than Wi-Fi can monetize mobile.



Bandwidth costs have declined by two orders of magnitude since 1999, as well. Some bandwidth costs have dropped even more. Comcast, for example, has been doubling bandwidth every 18 months.

That is as fast as Moore's Law might suggest is possible, though most might not believe it is possible in the capital-intensive and labor-intensive access networks business.

As crazy as it seems, U.S. Internet service provider Comcast, now the biggest supplier in that market, has doubled the capacity of its network every 18 months.

In other words, Comcast has  increased capacity precisely at the rate one would expect if access bandwidth operated according to Moore’s Law.

And that, also, means consumers of apps, as well as suppliers of apps, can reach more people than ever, more affordably than ever.
Post a Comment

Popular posts from this blog

Voice Usage and Texting Trends Headed in Opposite Directions

What to Do About Industry Challenges? "Take the Package," One Exec Quips

Verizon has a Brand Promise Problem