Can consumers look forward to 1GB of mobile data per day? Photo: Mike Segar
Mobile broadband vendor Nokia Solutions & Networks claims it will enable operators to offer phone subscribers 1GB of mobile data a day by 2020, for about the same price they are currently paying for their meagre 1GB of mobile data a month.
If NSN is able to pull off its plan – and it is a huge challenge – and enable mobile operators to offer subscribers about 30GB of mobile data a month, there will be significant consequences for the local broadband market, especially the embattled national broadband network.
Right now there is no problem with the speeds being offered by the big three local operators, Telstra, Optus and Vodafone. Their LTE speeds of between 20 megabits per second (Mbps) to 40 megabits per second are way faster than what most DSL subscribers are able to receive.
However, the tightly imposed LTE data-caps – with most post-paid subscribers taking 1GB-2GB per month plans – mean that only very light internet users can get away without a fixed-broadband connection, unless they are willing to pay $95 per month for Telstra’s 15GB offer or similarly expensive plans from other operators.
That may well change if NSN is able to implement its three-part strategy by expanding the network capacity available to mobile operators by a factor of 1000 by just 2020.
Firstly, NSN says it will work with operators to increase spectrum efficiency by using carrier-aggregation (which uses multiple spectrum bands to deploy LTE). Secondly, it will push governments and regulators to refarm 2G/3G spectrum or reassign unused or unlicensed spectrum in the 700-3600MHz range for LTE. Finally, it will get operators to deploy denser LTE networks by using small cells.
If the plan works, then local mobile operators will be able to move from their current strategy of offering mobile voice plus light usage mobile broadband to offering a fixed-broadband replacement service to a much larger part of the market, and that has to be bad news for NBN Co.
While there will still be a need for fixed-broadband – especially for heavy users of video – a 30GB mobile broadband connection delivering constant speeds of about 150Mbps over LTE-Advanced – already being trialled by Telstra – is going to be a very attractive proposition for many subscribers.
In its corporate plan, NBN Co estimated that 13 per cent of homes could become wireless-only households, although the company conceded this could go as high as 30 per cent, depending on the price of its services compared to mobile broadband.
Events in Korea, the world’s leading LTE market, have proven beyond doubt that once subscribers get access to very-high-speed LTE – with Korean operators offering LTE-Advanced with speeds of more than 150Mbps – demand for larger data allowances becomes very strong.
Indeed, only last week, all three major Korean operators launched all-you-can-eat LTE plans with LGU+ offering unlimited usage (which is throttled back to 3Mbps once a user has exceeded 2GB a day) for $82 a month, meaning subscribers get 60GB a month at full-speed LTE.
While their current strategy of having tightly capped plans has allowed Australian operators to avoid any spectrum shortage – you only need look at the failure to sell one-third of the prized “waterfront” 700MHz spectrum in the auction last May to see that – the approach has limitations.
After all, there is only so much people can really do with 1GB per month and such low data allowances restrict the kind of content and services operators can offer. But with much more capacity available, they can start to offer a much broader range of revenue generating services.
4G operators in Asia Pacific markets have often talked about creating a "personal broadband" product that can take a larger share of the fixed-broadband market, but spectrum constraints have largely frustrated them so far.
But if mobile operators really are able to deliver 30GB a month to subscribers in 2020 at about the same price they currently deliver 1GB or 2GB, then "personal broadband" will truly be back on track and fixed-broadband providers will have to fight hard to hold on to many of their subscribers.
While there is no doubt there will continue to be a place for both fixed and mobile broadband networks, the fact the LTE era – and the looming 5G era – is going to bring substantial advances in capacity is going to make life even harder for fixed-broadband providers such as NBN Co.
Tony Brown is senior analyst, operator strategy at Informa Telecoms & Media. He attended a company conference as a guest of the company.