To your first question about driving changes in bandwidth pricing:

The conundrum is that on per-bit basis, mobile bandwidth is priced according to the what price the market will bear for the service rather than the marginal cost of the load on the network. Mobile video, however it’s adopted, is far cheaper per-bit than SMS, even though mobile video loads the network far more. It’s a bit like pricing petrol in which your final destination (e.g. the grocery store versus picking up the kids at school) rather than your car’s fuel efficiency determines how much you pay to fill up the tank. Economically speaking, good for the carriers to have pulled off the trick this long.

If we look at future mobile cloud computing services, I believe that by necessity, there will be a near de-coupling of the bandwidth cost/price from the service being offered. This implies that voice, SMS, and other separately charged services get sucked into a basic access charge in a similar manner that email ceased to be a separately charged service on Internet or we can’t imagine buying a computer and a modem separately. I wrote in the piece that I think MCC-based services will mimic more of a CATV charging model (e.g. basic paid access with advertising, premium services, and pay-per-view) on the B2C end whilst the event-based usage migrate more to the B2B realm between the MCC platform provider (probably the mobile telco) and the MCC service provider.

Summarized, I think that mobile bandwidth will be priced in tiers just like fixed broadband. Metering mobile bandwidth at the B2C level brings us back to the bad old days when you watched your minutes for each call, counted each SMS, and hesitated before checking out that new mobile site. The trick seems to be dimensioning the fuel tanks in a way that makes sense that you get all you need for what you want but it’s not unlimited.

In terms of your second question about consumption habits, if there were virtually no barrier ubiquitous and flat fee (an admittedly perfect world compared to today), the logic suggests trivial water cooler transactions with data, apps and services will expand larger than *important* apps and we would be better for it…the true measure of success for a technical system is when its utility is matched by its invisibility (e.g. the user doesn’t need to know or care about what’s under the hood). Take automobiles. During the first few decades, you needed to be a mechanic as well as a driver to operate one effectively. Standardization gave you every color so long as it was black. Then big auto brands competed with each other to divide the world into neat chunks of Chevy, Citroen, Ford, or Mercedes drivers. Finally, transportation became a lifestyle statement with a significant amount of consumer customization before purchase. I can’t imagine mobile would evolve radically different. I would crudely place mobile data services just past the standardization stage technically and just starting to become a true lifestyle accessory.

The users have moved far quicker into the lifestyle stage with the industry scrambling to catch up.

Interesting brief. Well researched and summarized.

I have two questions:

-How do you see the users’ increased adoption of mobile services driving changes in how bandwidth is priced.

-If there were no barrier to ubiquitous and a flat fee global access, how mobile cloud computing would change consumption habits?