Why don't mobile companies concentrate solely on mobile data?

Forums › Spark New Zealand (including Skinny and BigPipe) › Why don't mobile companies concentrate solely on mobile data?

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Ultimate Geek
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#626553 16-May-2012 22:31

tdgeek:
Many users only text, or only call, r do both, they don't want data, or much data.

maybe because it is so expensive?

qwerty7

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#626554 16-May-2012 22:35

sbiddle:
qwerty7: Surely it is the way of the future though, with upgraded data networks etc why would we need text or call plans in 10 years time?

sbiddle:
Calling a physical phone in England incurs termination charges that have to be paid for by somebody. Calling somebody on Skype has no such charges, so comparing the two isn't fair.

^ This is the reason I find the potential of mobile data amazing. You can compare them, they are both means of communicating with someone with exactly the same result. (ok at the moment calling from your cellphone isn't that reliable but you get the point.)

I guess mobile companies are already looking at providing solely mobile data in the long term.

One is a legacy PSTN voice call, the other is a OTT service. They share absolutely nothing in common (apart from the mere fact OTT services are starting to hurt carrier revenue).

From a consumers perspective they are the same. OTT services are not going to stop hurting carrier revenue anytime soon. Which is why long term carriers will mainly be mobile data providers and messaging + voice data will be via mobile data.

qwerty7

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#626556 16-May-2012 22:39

Talkiet:
qwerty7: God i hate it in a forum when someone picks up on one word and then everyone jumps on the bandwagon..

I said BASICALLY FREE internet is cheap, the cost of a 10 minute skype call to England using your home broadband (when worked out in terms of data used vs monthly plan cost and data cap) is substantially less the calling England for 10 minutes on your cellphone, is it not?

I am really interested to understand if you really mean you think just by dropping text and SMS plans/capability, that the cost to a provider would drop by a significant amount?

You might lose some billing complexity, and some interconnect agreements - you might even lose some gateways.

But you still need to build towers, support systems, provision more backhaul than before, implement GOOD QOS (cos now people are putting emergency calls etc over packet data etc etc etc etc etc.

Basically (and bear in mind I don't even work in the mobile side of the business), there would be minimal short term cost reduction, and even in the long term I'd struggle to even conceptualise a drop of more than 5-10% costs. All this while GUTTING revenue, so there will never be another upgrade for the entire life of the Telco (which will be measured in months as they go out of business competing against others who still allow you to make phone calls).

Cheers - N

I don't know what gave you that impression. My example above is clearly from a consumers perspective. Which is why over time text and call plans will become a thing of the past and all information will be transferred on mobile data

Carriers will basically be mobile broadband providers.

tdgeek

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#626560 16-May-2012 22:47

qwerty7:
tdgeek:
Many users only text, or only call, r do both, they don't want data, or much data.

maybe because it is so expensive?

No. because that is what they use. Be it older users, users not technology literate, or because that is what they prefer.

Talkiet

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#626561 16-May-2012 22:48

qwerty7:[snip]
I don't know what gave you that impression. My example above is clearly from a consumers perspective. Which is why over time text and call plans will become a thing of the past and all information will be transferred on mobile data

Carriers will basically be mobile broadband providers.

And consumers are the most important part of our business - without them I'd not have this job and there would be no point producing the products and services.

That said though, while over time more services (voice, messaging) will increasingly be transported over IP, that doesn't magically decrease costs as much as many people think it will.

Just as an example to show what I mean (and these numbers are not accurate), assume the following.

To provision a service with Voice, SMS and Data may cost $20/month for a provider. This MIGHT be made up up a network and billing/service overhead of $16, SMS costs of $1, voice costs of $1 and data costs of $2.

Say the provider decides to drop voice and SMS from the package - assuming no costs to turn these services off, the cost of the package is now $18/month.

Now I am not saying these numbers are right, I'm not even saying the proportions are close to reality - but I am saying that the overheads to offer a service, along with the network required to deliver the service don't scale back dramatically when you remove a couple of specific applications from it.

Cheers - N

Please note all comments are from my own brain and don't necessarily represent the position or opinions of my employer, previous employers, colleagues, friends or pets.

jonb

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#626562 16-May-2012 22:49

Carriers will basically be mobile broadband providers.

That is what a lot of analysts of the telecommunications industry are predicting, and it exactly what the mobile networks are fighting their hardest to prevent: the commoditisation of the industry = lower /none existent profits. Becoming 'dumb data' pipes does not have anywhere near the margins of voice and text.

qwerty7

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Ultimate Geek
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#626575 16-May-2012 23:14

Talkiet:
qwerty7:[snip]
I don't know what gave you that impression. My example above is clearly from a consumers perspective. Which is why over time text and call plans will become a thing of the past and all information will be transferred on mobile data

Carriers will basically be mobile broadband providers.

And consumers are the most important part of our business - without them I'd not have this job and there would be no point producing the products and services.

That said though, while over time more services (voice, messaging) will increasingly be transported over IP, that doesn't magically decrease costs as much as many people think it will.

Just as an example to show what I mean (and these numbers are not accurate), assume the following.

To provision a service with Voice, SMS and Data may cost $20/month for a provider. This MIGHT be made up up a network and billing/service overhead of $16, SMS costs of $1, voice costs of $1 and data costs of $2.

Say the provider decides to drop voice and SMS from the package - assuming no costs to turn these services off, the cost of the package is now $18/month.

Now I am not saying these numbers are right, I'm not even saying the proportions are close to reality - but I am saying that the overheads to offer a service, along with the network required to deliver the service don't scale back dramatically when you remove a couple of specific applications from it.

Cheers - N

I never said it would magically decrease the cost to the carrier. My point is now the carrier has an extra $2 to invest in providing mobile data which will eventually bring the cost down. At the end of the day using mobile data for messaging + voice + data has some great advantages for the consumer. That is basically what this whole thread is about. And I guess / hope that is where they are heading.

jonb:

Carriers will basically be mobile broadband providers.

That is what a lot of analysts of the telecommunications industry are predicting, and it exactly what the mobile networks are fighting their hardest to prevent: the commoditisation of the industry = lower /none existent profits. Becoming 'dumb data' pipes does not have anywhere near the margins of voice and text.

They cannot stop it, it would be better if they run with it, do they really have a choice? Unless they want to keep mobile data prices at a horrendous level which will do nothing but stall technological development. That is like the post office trying to stop emails or the cd shop trying to stop itunes.

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quickymart

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#626576 16-May-2012 23:15

I can safely say that at least half of my family never use mobile data and only use their (non-smart)phones for voice and SMS. Why would you turn off two much-used services and only have data? Seems pointless to me.

Talkiet

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#626579 16-May-2012 23:19

qwerty7:
I never said it would magically decrease the cost to the carrier. My point is now the carrier has an extra $2 to invest in providing mobile data which will eventually bring the cost down. At the end of the day using mobile data for messaging + voice + data has some great advantages for the consumer. That is basically what this whole thread is about. And I guess / hope that is where they are heading.

I don't doubt that mobile data is going to become more pervasive as a transport for a whole bunch of new and existing services, but I believe we're a fair way off being able to NOT PROVIDE SMS OR VOICE as a service on a mobile plan.

I have NO DOUBT however there are bleeding edge adopters that would love to save the $2 (or whatever it is) and use data for everything today - it's just that I doubt that's something the average consumer wants today, or tomorrow, or even in the next 5 years.

Still, there's nothing stopping a provider offering a data only service... I wouldn't use it unless it offered substantial savings though.

Cheers - N

Please note all comments are from my own brain and don't necessarily represent the position or opinions of my employer, previous employers, colleagues, friends or pets.

tdgeek

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#626588 16-May-2012 23:33

Talkiet:
qwerty7:
I never said it would magically decrease the cost to the carrier. My point is now the carrier has an extra $2 to invest in providing mobile data which will eventually bring the cost down. At the end of the day using mobile data for messaging + voice + data has some great advantages for the consumer. That is basically what this whole thread is about. And I guess / hope that is where they are heading.

I don't doubt that mobile data is going to become more pervasive as a transport for a whole bunch of new and existing services, but I believe we're a fair way off being able to NOT PROVIDE SMS OR VOICE as a service on a mobile plan.

I have NO DOUBT however there are bleeding edge adopters that would love to save the $2 (or whatever it is) and use data for everything today - it's just that I doubt that's something the average consumer wants today, or tomorrow, or even in the next 5 years.

Still, there's nothing stopping a provider offering a data only service... I wouldn't use it unless it offered substantial savings though.

Cheers - N

Yes, and the OP can go this way now, he doesn't have to wait. Just cancel the plan on his mobile phone, and get a mobile BB plan instead, then he can talk and text and data on that using Skype and any of the many data messaging apps out there. I just hope his friends and family all have smartphones with those apps installed. But if he needs to call his bank, city council, etc, etc he will have to pop home first

blakamin

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#626591 16-May-2012 23:49

tdgeek:

Yes, and the OP can go this way now, he doesn't have to wait. Just cancel the plan on his mobile phone, and get a mobile BB plan instead, then he can talk and text and data on that using Skype and any of the many data messaging apps out there. I just hope his friends and family all have smartphones with those apps installed. But if he needs to call his bank, city council, etc, etc he will have to pop home first

Or he could just buy skype credit and call all those numbers...

tdgeek

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#626592 16-May-2012 23:53

blakamin:
tdgeek:

Yes, and the OP can go this way now, he doesn't have to wait. Just cancel the plan on his mobile phone, and get a mobile BB plan instead, then he can talk and text and data on that using Skype and any of the many data messaging apps out there. I just hope his friends and family all have smartphones with those apps installed. But if he needs to call his bank, city council, etc, etc he will have to pop home first

Or he could just buy skype credit and call all those numbers...

Good point

Wade

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#626593 17-May-2012 00:04

If I understand the OP correctly what he is suggesting is similar in concept to naked broadband & voip, since the unbundling began what has the uptake been and has that been to the detriment of fixed line providers?

I personally see voip/naked BB becoming the norm in the next few years, i suppose OP is questioning will there be a similar trend in the mobile world? Having a voip acct as my primary 'number' and using my naked BB and a mobile data plan in parallel I gain complete portability and economy not to mention potentially eliminating intl toll charges?

qwerty7

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Ultimate Geek
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#626642 17-May-2012 08:15

Wade: If I understand the OP correctly what he is suggesting is similar in concept to naked broadband & voip, since the unbundling began what has the uptake been and has that been to the detriment of fixed line providers?

I personally see voip/naked BB becoming the norm in the next few years, i suppose OP is questioning will there be a similar trend in the mobile world? Having a voip acct as my primary 'number' and using my naked BB and a mobile data plan in parallel I gain complete portability and economy not to mention potentially eliminating intl toll charges?

exactly,

I don't know how much telcos make on calls, but things like viber using mobile data are probably the reason the price of calling is coming down. They want to keep you making traditional calls, and the alternative has advantages.

sbiddle

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#626645 17-May-2012 08:21

qwerty7:
Wade: If I understand the OP correctly what he is suggesting is similar in concept to naked broadband & voip, since the unbundling began what has the uptake been and has that been to the detriment of fixed line providers?

I personally see voip/naked BB becoming the norm in the next few years, i suppose OP is questioning will there be a similar trend in the mobile world? Having a voip acct as my primary 'number' and using my naked BB and a mobile data plan in parallel I gain complete portability and economy not to mention potentially eliminating intl toll charges?

exactly,

I don't know how much telcos make on calls, but things like viber using mobile data are probably the reason the price of calling is coming down. They want to keep you making traditional calls, and the alternative has advantages.

You're still failing to acknowledge the fact existing mobile technologies are focussed around providing legacy switched circuit voice services. They are not primararily intended for delivering IP or IMS services and simply don't have the ability or capacity for this.

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