So a question came up yesterday during my tutorial at MBX – what’s going to happen to throughput on cellular networks over the next few years, and ditto for prices. I’ve contended for some time that any discussion of 100 Mbps (LTE and WiMAX Wave-2 speeds) on future networks is purely academic. We can certainly increase overall capacity by improved modulation techniques and splitting big cells into smaller cells. The question is, though, whether the carriers intend to lead us to this new land of abundance and landline equivalency, or whether they’ll instead practice the more contemporary approach of better profits through scarcity. Unfortunately, my money’s on the latter.
Just look around. The economy continues to sour (although it’s nowhere near, as some have claimed, a new depression), and investment across the board is being cut back. Oddly, there’s often improved profits in this approach; just look at the oil industry (less supply for whatever reason, increasing demand, and thus higher prices, and, with managed costs, improved profits) and the airlines (eliminate unprofitable routes and cut back on service overall, and ditto), and it’s not hard to see that there’s big bucks in scarcity. In a properly functioning economy, of course, someone would step in and create more supply, thereby correcting the imbalance and ultimately driving prices lower. But in today’s economy, and especially with respect to industries that require massive investment (oil, airlines, and cellular), such investment isn’t possible. There’s no money. So some industries might (and in the case of the airlines, will) even shrink a bit, but they can make more money by offering less or even worse service until (and if) core demand subsides. That won’t happen in the case of cellular. We can drive and fly less, but it’s hard to talk less. And most will give up landlines before they give up cellular.
So, with less and slower investment, I see 3.5G (HSPA) and especially 4G (LTE and Wave-2 WiMAX) taking a lot longer now to roll out. Prices will in fact increase, perhaps even for current services. That’s supply and demand at work. And, of course, we poor users won’t be able to reap the benefits of improved mobile telecommunications in the near term, and the price will be higher when we do. We’ve already seen caps placed on monthly wireless data volumes, and responsiveness (net throughput) is no where near as good as the carriers currently claim in their marketing. And the really sad part is this situation won’t get corrected anytime soon,
Such is the politics (and economics) of scarcity.
