"Wi-Fi-Only" Works About Half the Time: Issue is What Might be Possible in Future

Historically, the big value mobile phones represented was the untethering of "calling" from places. In fact, so great was the value that mobile calling displaced less expensive place-based calling. 

More recently, the value of a BlackBerry was the ability to use email anywhere. In the latest iteration of the untethering trend, people now expect to be able to get access to the Internet anywhere they are. 


But there is another trend happening as well, namely that people find it useful to shift Internet app consumption to stationary or fixed modes, to avoid mobile Internet access charges. In other words, mobile networks are for mobility, fixed networks are for capacity. 

And since perhaps 80 percent of Internet data consumption now occurs "indoors," capacity increasingly has become the value, rather than mobility, even for mobile devices. 

That is not to say nomadic access is not important, only that essentially tethered access has become more important. Just how important remains to be seen. 

Generally, one might say that "synchronous" or "real time" communications and apps benefit from "anywhere, anytime" access. Asynchronous apps and communications (email, voice mail, blog and social posts) can tolerate some periods of disconnection, and are better suited to place-based access. 

So the issue is the degree to which growing use of asynchronous apps means access can be useful if it is "not always connected," as is the case for any user relying on devices with Wi-Fi access only, and not full mobile network access. 

At least so far, voice and messaging devices (phones) have benefited from "anywhere, anytime" access. PCs and now tablets often can provide high value even when connectable only sometimes. 

The big zone of uncertainty is whether smart phone Internet access demand will change to any great extent. The possible change is voice and messaging on the mobile network, with Internet access mostly or even exclusively based on Wi-Fi access. 

Smart phone owners know they can use Wi-Fi access inside and outside the home, and there is a financial benefit to doing so.

Mobile service providers also realize they can avoid capital investment by encouraging their users to switch their devices to Wi-Fi whenever possible, as well.

Voice-based or communication-based applications generally are not the best candidates for “Wi-Fi-only” networks. But tablets, PCs and Chromebooks are a different matter. And smart phone Internet access already is a case where mixed access is the norm. That already is allowing creation of business models based primarily on fixed access (Wi-Fi) with a mobile overlay.

34 Percent of Global Tablets will be Cellular Connected by 2017

BT, for example, appears to be thinking along those lines.

Having won 4G spectrum (2x15 MHz of FDD and 20 MHz of TDD 2.6GHz spectrum), BT suggested it would not build a retail mobile network, but use 4G to augment BT's fixed networks.

Now BT says it will launch its own retail network.

The thinking is that BT will source wholesale mobile connectivity from one of the U.K. mobile service providers to provide full mobile access, while using its own spectrum largely for fixed or location access.

That is analogous in many ways to the ways mobile service providers already blend full mobile access plus Wi-Fi access. The potentially big challenge is whether it might eventually be possible to create 

Wi-Fi only  

access services that have high value even if there is no mobile access, as once was thought feasible around the turn of the century. 

Those of you who travel outside your home country already do this: you turn off your mobile Internet access and rely only on  

Wi-Fi  

when out of country. 

Lower Prices Spur India 3G Data Consumption

Mobile data traffic on India’s 3G networks grew 196 percent between December 2011 and December 2012, according to Nokia Siemens Networks. Mobile data traffic on 2G and 3G networks grew 92 percent over the same period, while 2G network traffic grew 66 percent.

According to the study, each 3G user currently consumes close to 300 percent more data on an average than a 2G user. Currently, a 3G user consumes 434 MB per month on an average while a 2G user consumes 115 MB per month.

In the first half of the research period, December 2011 to June 2012, data traffic generated by 3G services increased by 78 percent while that of 2G services increased by 47 percent.

In the second half, July 2012 to December 2012, data traffic generated by 3G services increased by 54 percent while that of 2G services increased by 18 percent.

Lower 3G prices contributed to growth of 3G usage, Nokia Siemens says.



Robust competition probably will ensure that prices continue to drop. 

"Build Where the Demand is Greatest" Even if "Universal Service" Suffers

One key innovation Google Fiber has brought to the construction of fiber to home networks is the “build first where there is greatest demand” principle.

Veterans of the telecom and cable TV business immediately will recognize that this flies in the face of established precedent that “universal service right now” is more the legacy principle. But proponents of gigabit networks already have moved to embrace the idea of “building where you can, right now” as a way to stimulate the building of gigabit networks on a wider basis.

That might now be the thinking of analysts at Point Topic, looking at building of new 30-Mbps networks throughout the European Union. In other words, the greatest progress, at the lowest cost, will happen when urban networks get built first, rather than giving priority to rural areas.

But analysts at Point Topic also do estimate it will cost far less than previously estimated to provide 30 Mbps service on a ubiquitous basis across the European Union.

Point Topic estimates it could cost €82 billion, though other estimates have ranged as high as that produced by the European Commission of €180 to €270 billion.

The FTTH Council quotes an estimate of €202 billion as the total cost of meeting the Digital Agenda targets with fiber-to-the-home networks.

The Point Topic estimate is dominated by the €52 billion cost for reaching rural areas, defined as those areas with a population density of less than 100 persons per square kilometer.

Covering the semi-rural areas, home to 15 percent of the EU’s population, would cost another €22 billion.

Completing coverage in the urban areas, those with a population density of 600 per square kilometre or more, would cost only €8 billion and reach 71 percent of the population.

That new estimate illustrates the problem all fixed networks face, namely the high cost of building networks in areas of low population density.

The cost of rural networks also accounts for the country by country costs of construction.

France has the biggest requirement of all at €17.5 billion, whereas the United Kingdom, similar in population but with only 37 percent of the land area, needs only €7.5 billion to build its national network. The reason is the higher percentage of rural areas in France.

The key insight here is perhaps not that the actual cost of building a fiber to home network has changed significantly. But there is a seemingly growing practical realization that high-capacity networks need a business model, and that model probably only works well in some neighborhoods in any given city.

Other initiatives such as Gig.U use the same principle, recognizing that gigabit networks cannot be build, or sustained, everywhere, right now.

But Google Fiber will test whether it is possible to operate at dramatically lower costs, or with a new business model, depending on take rates for a disruptive value proposition.

Order of Magnitude Lower Mobile Base Station Costs?

An order of magnitude lower costs is the sort of cost reduction that often is crucial in getting Internet access or communications to users in developing regions. Lower power consumption and simplicity also are advantages, and all of that seems to be what Range Networks is after.

Using an open source software approach to costs, Range Networks hopes to provide mobile network infrastructure adapted to the requirements of developing regions.

A low cost single tower mobile service is enabling communities in rural Papua, Indonesia, for example, in a location a four hour drive away from the nearest mobile tower.

The deployment is a collaboration between cellular systems provider Range Networks and the UC Berkeley Technology and Infrastructure for Emerging Regions (TIER) research group.

The deployment uses a satellite connection to reach the backbone telecom networks, but all local traffic (the network can reach a neighboring village one mile distant)  is handled essentially peer to peer, avoiding use of the backhaul.

You Aren't Just a Customer: You are Becoming the Product

In terms of business model, users of "no incremental cost" applications, supported by advertising, make the user the product. Now subscribers to mobile services are similarly becoming the product, as carriers sell marketing data, at least at a "subscriber non-identifiable" level. 

Precision Market Insights offers businesses such as malls, stadiums and billboard owners statistics about the activities and backgrounds of mobile users. 

A Processor View of "Post PC"

At the processor level, here is one way of looking at the "post PC" trend. Because of a fall in sales of PCs, AMD has fallen from the number-two spot for processors to the fourth position, in terms of market share. 

Qualcomm and Samsung moved up, both on the strength of sales of mobile processors. 

AMD's market share dropped 21 percent, year over year, between 2011 and 2012, while Intel dropped one percent. Samsung, which supplies processors for Apple, among others, grew share 78 percent, while Qualcomm grew share 28 percent.

Twitter Starts to Get Traction

The issue some observers have had about Twitter is that, compared to other social networking sites, it was not used by many people.

The other issue has been that, even if some older users availed themselves of Twitter, teens did not use Twitter. 

That seems to be changing. 

Some 24 percent of online teens now use Twitter, a figure that is up from 16 percent in 2011 and eight percent in 2009.

In fact, say researches at the Pew Research Center's Internet and American Life Project,  teenagers’ use of Twitter now outpaces that of adults.

About 16 percent of online adults are Twitter users, up slightly from the 12 percent who were using Twitter in 2011.

As with some other highly popular Internet apps, Twitter suggests that early adopters can come from other demographic segments that teens or even college age users. YouTube, blogging sites and LinkedIn provide examples.