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Is the "Last Mile" going Wireless?

Fri, 05/27/2011 - 8:20am

ericRecently I read the April 2011 edition of the Deutsche Bank newsletter Signals to Investors that covered testing of cellular data speeds in various parts of the US.  The testing included Sprint, the T-Mobile 4G network and Verizon’s LTE network. The results of the Verizon LTE testing in particular caught my interest as regards a future Life without Wires™. In particular, the data demonstrated that for the locations tested Verizon’s average upload speed was over 7 Mbps and the average download speed was in excess of 13 Mbps; far ahead of their competition. Verizon has a few different data plans, a 5GB per month plan is $50, a 10GB per month data plan is $80 and a 20GB per month data plan is only $90. To put these plans into perspective, according to recent data published in a Cisco white paper, the average US consumer uses 12GB per month of bandwidth. In addition, ATT has stated that only 2 percent of their users exceed 18GB per month. Contrasting these wireless services with wireline DSL and cable plans and you will find they typically cost $50 to $60 per month and don’t have a data limit.       

What all this data suggests is that if you are a light user of data you could easily switch to Verizon’s 5GB per month data plan, have the added convenience of wireless, and pay nothing extra. Moreover, this data also suggests that Verizon’s 20GB/month plan at $90 may very well be an attractive plan for cord cutters. In particular younger cable subscribers who are comfortable consuming Hulu, NetFlix movies and other forms of online content and aren’t addicted to the cable companies content will be really attracted to this type of service. It is very conceivable that dropping $50 to $100 of cable programming services per month in favor of using the web for over-the-top content and thus cutting the cable would be a more cost effective and convenient way to consume content. I can easily imagine young professionals and young families who would find the wireless convenience of a Verizon LTE data service lower cost and a generally superior offering to their current plan. Even professionals whose employer may subsidize their basic 5GB wireless data plan may decide the convenience of wireless is too great to resist. These over-the-top content alternatives are made even more viable by products such as the Imation Link or the new Intel WiDi-2 laptop-to-TV product that can be used with brand new Sandybridge based laptops to stream internet content to an HDTV.      

In summary, for as long as I have been around data communications, which is more than two decades, there has been this fantasy that wireless technology would one day be a viable substitute for other “last mile” technologies. Given the performance and economics of Verizon’s LTE network, it seems we are on the threshold of that era where the convenience and cost effectiveness of wireless will be a viable alternative to using DSL or Cable data and content services. We are that much closer to Life without Wires. 

     

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