As Data Overtakes Voice, Mobile Costs Rise

Chances are you’re using your cellphone more for data purposes than voice calls these days. That’s a shift we’ve covered here before, and one that New York Times reiterates by noting that last year, the amount of data in the form of texts, email, video and web surfing surpassed the total amount used for basic voice communication for the first time ever. And the rise of social networking means this trend will only pick up steam as time goes on. But while unlimited voice plans are readily available, the bandwidth required is enormous compared to that needed for voice, which means carriers with a relatively fixed network infrastructure can’t offer truly unlimited data.

Using Rysavy Research’s “Mobile Broadband Usage Constraints” report, I chose a few basic activities to represent common consumer usage. The assumption used in the report is that a consumer would be doing each activity for 60 consecutive minutes — not necessarily a real-world scenario, but a baseline used to illustrate a glaring point in the final column: the bandwidth required for data activities as compared to a voice call.

Bandwidth use of voice and data activities
Activity Bandwidth Throughput/hour MB/hour Voice multiple
Voice 9 kbps 31.64 Mbps 3.96 1
Medium-quality music stream 128 kbps 450 Mbps 56.25 14
Browsing 1024 kbps 3600 Mbps 450 114
Streaming video 2048 kbps 7200 Mbps 900 228

Again, there’s some assumptions built in here, but for illustrative purposes, it’s easy to see why carriers with a relatively fixed network infrastructure can’t offer truly unlimited data.

For starters, there’s only so much wireless bandwidth to go around and when consumers are partaking in activities that use 228 times more of that bandwidth than a voice call, limited carrier infrastructure simply can’t handle the overall demand. Secondly, the pricing model isn’t equipped for truly unlimited use. Using a relatively standard $60 mobile broadband plan that includes 5 GB of data throughput a month, the cost per hour of activity rises dramatically. These plans equate to customers paying for 1.2 cents per megabyte of usage, so that hour of video streaming costs $10.55 an hour — 5.68 hours of video playback would eat through the 5GB purchase and leave no bandwidth for any other connected activities.

I’m a consumer and one that wants unlimited 3G access more than almost anything. But I also see the other side of the coin — can carriers provide an all-you-can-eat broadband buffet table at a price that’s affordable to us?

Related content from GigaOM Pro (sub req’d):

Mobile Broadband: Pricing for Profits