Monday, February 17, 2020

Is Mobile Internet Access "More Valuable" than Fixed?

Looking only at the cost per bit, one might conclude (incorrectly, perhaps) that mobile data access is deemed more valuable than fixed network access. One might also argue that the value of mobile bits is in some sense "greater" than fixed access precisely because it represents "access at any time, anyplace" instead of "at one place."

It is somewhat impressionistic, but mobile service adoption rates do suggest there is something consumers consider quite valuable. Consider adoption rates: mobile got adopted explosively, compared to fixed network service. That suggests a clear and strong sense of value on the part of consumers.


It also is suggestive that mobile cost per bit has been 10 times higher than that of fixed access.

On the other hand, most surveys show relatively balanced levels of data consumption--mobile or fixed--on a global basis. Some consumption is mobile-only; some is fixed-only.

About half of consumption is untethered devices using fixed network resources (Wi-Fi in particular). 


Nor is it easy to compare the value of fixed access compared to mobile access. Mobile access costs more, per bit, but consumption also is far less than on a fixed network. Fixed network consumption costs less per bit, but consumption levels are higher than on a mobile network.

Basically, 80 percent of device traffic demand is from fixed networks, though roughly half of all device traffic demand is from mobile devices. In part, that might be because mobile users know they can save money by offloading to Wi-Fi.

It is difficult to say how much that disparity is driven by perceptions of value and how much from the sheer disparity in transmission network bandwidth. Mobile bandwidth is highly restricted by the amount of spectrum available for mobile networks to use. Cabled networks have virtually unrestricted capacity upside.

Still, to the extent that value and price are directly related, mobile access might be deemed to be more valuable than fixed bandwidth, per-bit, when consumed "on the go," where fixed connections are not possible. The high use of Wi-Fi as a mobile network offload mechanism speaks to the cost differences between mobile and fixed networks.

The value of data access is not necessarily directly proportional to the volume of data consumed. A relatively small amount of data used for a navigation app or social network might have high value, while a large amount of data consumed by a video might have relatively lower value.

So the value of mobile internet access is not directly related to the volume of consumed bits.

Some might argue that “most” consumers will have little need for internet access on their phones. Many of us would strongly disagree with that notion. Some even have argued that only about 35 percent of phone users would be willing to pay for internet access on their devices. 

It is safe to say many of us believe a standard Bell curve of demand is the more likely outcome, where nearly every user buys some mobile data access. 

All internet access seems to be deemed valuable by consumers. It also is possible to argue that mobile access "anywhere" continues to enjoy a cost premium compared to fixed network access, as important as that is. 

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