Saturday, July 16, 2022

Supply and Demand in Several Forms Shapes Customer Experience

Typical customer experience on any retail connectivity network--mobile or fixed--fluctuates over time, in part because of the way networks are designed to operate and in part because network usage varies over time. 


Network capability increases in a stair step fashion. Networks are built. Demand gradually increases, stressing network capacity. So an upgrade happens. Demand slowly builds again. Then another upgrade happens. 


source: Cloudtp 


Something of the reverse happens to older platforms: as the networks become saturated, experience decreases. A next-generation network is launched and experience on the new network is better. 


Paradoxically, experience on the legacy network also can improve, up to a point, as users migrated to the newer platform, freeing up capacity on the legacy network. 


As one example of how loading affects a new platform, Verizon’s 5G typical performance dropped when more customers started using the network.  That is more likely to happen when the new platform is bandwidth constrained, as the early Verizon 5G coverage network was limited by use of low-band spectrum. 


User experience on 2G networks when 3G was launched, or 3G experience after 4G was launched provide examples of how legacy network experience can improve after a replacement network is launched. 


Up to the limitations of each platform,  as users migrate to the next-generation platform, there is less contention for resources of the legacy network. So users who remain on the legacy platform can have better experiences as there is less contention for those resources, up to the limits of the platform. 


In some markets, for example, the 3G network winds up used mostly for voice connections, while data demand is shifted to 4G. In some markets, for a time, 4G will increasingly be used for voice, while 5G handles the bulk of data activity, as more users switch to 5G. 


There also is a demand effect. As more users migrate to mobile services as their primary voice connection, customers who remain users of fixed network voice tend to have good reasons for doing so. So aggregate customer satisfaction among those users can increase as well. The less-satisfied customers already have left. 


The process then plays out further, as the performance gap between legacy and newer networks widens. Eventually, it makes sense to decommission the older legacy networks. In the mobile business, that means shutting down older networks entirely and repurposing the spectrum resources.


In the fixed networks business it means either decommissioning the public switched network entirely or replacing copper access with optical fiber; upgrading hybrid fiber coax networks to newer versions of DOCSIS; or substituting fixed wireless or satellite connections for copper access. 


But marketing also plays a role. Some of us buy gigabit per second fixed network access though we do not really need it. More of us will buy symmetrical connections even though we really do not need it. Those supply side effects will change demand curves. 


The point is that end user experience on a network is shaped by both demand and supply actions, including marketing, not just capital investment to upgrade the networks. Also, user experience on a new network will decline with network loading, while experience on the legacy networks can improve, as loading decreases.


No comments:

Directv-Dish Merger Fails

Directv’’s termination of its deal to merge with EchoStar, apparently because EchoStar bondholders did not approve, means EchoStar continue...