Industry Voices—Blaber: Rethinking mobile data plans in the era of gigabit LTE

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Industry Voices Geoff

While supporters of 5G technology are looking ahead to 2020 and beyond, the coming 12 months will pave the way to substantial advances in mobile connectivity. Gigabit LTE forms an important stepping stone to 5G networks, promising to deliver data throughput that will change the way we think about mobile network access.

This echoes how usage transformed when fixed-line broadband went from dial-up to 1 Mbps and 2 Mbps, and when 3G transitioned to 4G LTE. Indeed, history shows that such major transitions in connectivity can have large-scale impacts as developers are given the tools to rethink and disrupt entire industries.

The mobile video boom

For example, since the deployment of 4G LTE, video usage has grown from almost nothing to account for more than half of the network traffic of most Western mobile network operators. Cisco predicts that by 2020, 75 percent of mobile data traffic will be video. Netflix is the obvious example of a company that has ridden this wave with connectivity driving three major transitions since 2007. The company has gone from physical media distribution through the mail, to streamed TV and movies, to original content investment and production.

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Developers have benefitted from the accessibility of cloud infrastructure, with back-end elements including storage, analytics, management services and tooling all readily available. They have enabled companies to focus on their core competencies and outsource all the necessary technical infrastructure. Connectivity is the lifeblood.

Until now, high-bandwidth applications have relied on fixed-line connections, which have offered superior connectivity. But with gigabit LTE, the distinction between fixed-line and mobile broadband in terms of throughput is shifting in favor of mobile. A report in August 2016 by Ookla stated that the average fixed-line broadband download speed in the US was about 55 Mbps. This will fall far short of the average data rates promised by gigabit LTE — over 100 Mbps according to tests by Qualcomm.

If the mobile experience is better than fixed-line broadband and priced competitively, it could transform user behavior and reduce dependency on Wi-Fi. In a precursor to moves with early 5G launches for fixed wireless access, some network operators will experiment with service and pricing that enable LTE to compete against fixed-line broadband.

A coming shift from downloaded apps to streaming

Gigabit LTE will also encourage developers to think differently about how applications and services can adapt. The nature of home broadband usage has transformed in the past five years as bandwidth has grown. The number of connected devices and video consumption have all risen considerably.

If throughput is consistently in triple digits, the time to install and access an application that may only be used infrequently will place undue friction in the user experience. Here, the concept of application streaming announced by Google makes more sense. Instead of downloading and installing an application, an instant app is streamed to the phone, surfacing content that resides within it from a Google search and without needing installation.

Such changes touch on a broader theme: the logic of local storage. It is likely to become faster for a user to access a file in the cloud than locally — network latency permitting. Netflix is betting that as network performance continues to improve, the user experience of downloading individual movies will become increasingly flawed: waiting for the content to download, downloading the wrong movie, running out of storage, and so forth. Seamless, on-demand access from the cloud is simply a better experience for users in such circumstances.

In this context, the prospect of Windows 10 coming to ARM-based Snapdragon 835 processors with an integrated gigabit-capable LTE modem and airtime that can be purchased conveniently from the Windows store is exciting and overdue.

Unlimited plans will drive demand

Unfettered connectivity could transform the computing experience and enable Microsoft to explore a new means to drive service adoption and consumption. For example, the zero-rating (of OneDrive or Office) is a potential move that would enable users to maximize their experience without incurring the cost of mobile data.

Gigabit LTE holds significant promise in how it will enable developers to create new experiences, what that means for consumers and how behaviour is likely to change. However, the technical enablers are just one piece of the puzzle.

For mobile broadband to create new kinds of experience, the economics must comprehensively change. This means flat-rate, unlimited data plans without undue restrictions that in turn spur more demand. With the network and spectral efficiency gains of gigabit LTE, there is a strong argument that more generous data allowances can be more easily justified, at least for users with compatible devices.

Geoff Blaber is Vice President of Research for the Americas at CCS Insight. Based in California, Blaber heads CCS Insight’s Americas business and supports the range of clients located in this territory. Blaber's research focus spans a broad spectrum of mobility and technology, including the lead role in semiconductors. He is a well-known member of the analyst community and provides regular commentary to leading news organizations such as Reuters, the Financial Times and The Economist. You can follow him on Twitter @geoffblaber.

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