Smartphones have come a long way over the years. The smartphones we use today have much more internal storage capacities, better cameras, processors, etc., than the ones just a few years ago. Smartphone displays are much better now in terms of color accuracy and resolution, and processors in today’s smartphones pack more processing power and consume lesser power than their predecessors. Almost every aspect of the smartphone has become better by leaps and bounds over the years.
However, two things that have always been limiting the potential of our smartphones are bandwidth and battery. When it comes to battery, we still have not found a mainstream battery technology which can help us store much more power without having to expand the physical size of the battery. Open up any smartphone and it becomes clear that batteries still command the vast majority of space. The power density of batteries has not improved like the transistor density has in the case of semiconductors. There have been technologies such as Qualcomm’s Quick Charge and OnePlus’ Dash Charge to cut down charging time but batteries, in general, have hardly improved by leaps and bounds.
Taking the cap off mobile broadband usage
The other limiting factor has been bandwidth. When it comes to bandwidth, the situation is a little mixed. Fixed broadband in most developed countries now has enough speed and the cap is high enough to make bandwidth seem like a non-issue at least when you are at your house or your office or any place with access to high-speed Wi-Fi. However, the bottleneck has always been mobile broadband. When it came to mobile broadband, after the introduction of LTE, the problem of speed was solved. In today’s world, any decent LTE connection can easily give you 30-50 Mbps. However, the problem with mobile broadband has been that of the cap. LTE speeds have been continuously increasing but mobile operators have still been charging us on the basis of per-GB usage.
Over the past two years, there have been interesting developments in the US telecom sector. Sprint and T-Mobile finally introduced unlimited LTE data plans and although AT&T and Verizon were reluctant at first, they too had no option but to do so. AT&T launched an unlimited LTE data plan for customers who had subscribed to DirecTV. Verizon, the largest telecom operator in the US, was still reluctant in coming on board the unlimited LTE bandwagon, but with T-Mobile rapidly improving its LTE network and Verizon losing hundreds of thousands of subscribers every quarter, even Verizon unveiled a competitively priced unlimited LTE data pack last week. With Verizon’s announcement, all operators in the US now offer unlimited LTE data packs. With this, the bandwidth stops being a bottleneck in smartphone growth. But it will have other consequences.
Why unlimited data in the US matters?
The US is definitely not the first country where operators have brought about unlimited LTE data packs. There have been other countries where operators had begun providing unlimited LTE data packs long before they started happening in the US. However, these were countries with a much smaller population than that of the US, often having a population of just tens of millions or even lesser and each carrier just had a few million subscribers.
The US, by comparison, is the biggest country ever where operators have started providing unlimited LTE. The top carriers in the country, i.e., AT&T and Verizon, have a subscriber base greater than 100 million and Sprint and T-Mobile have a subscriber base greater than 50 million. All the carriers in the US have a combined subscriber base of around 320-360 million. When such a large base of ‘affluent’ subscribers is given access to unlimited LTE, then the change in behavior is big enough to warrant changes in the way in which tech companies design their products.
Right from Apple selling subsidized iPhones to Android’s fragmentation problem, a lot of things that happen in tech are directly correlated with the telecom industry of the US. With users now having access to unlimited LTE, these tech companies are going to advance the development of their tech products in such a manner that mobile bandwidth is no longer a bottleneck and this will have some interesting ramifications.
Net Neutrality no longer an issue
This is one of the more interesting aspects of unlimited LTE data packs making its way to the US. Currently, the Net Neutrality debate in the country is very much centered on zero rating just like in India. FCC has already sent letters warning AT&T and Verizon that their practices violate Net Neutrality rules. Specifically, the FCC feels that AT&T zero rating Direct TV’s OTT app and Verizon zero rating parts of its Go90 app are anti-competitive. Although Net Neutrality rules in the US also revolve around paid prioritization, the way in which Net Neutrality seems to be breaking is by operators zero rating their own apps.
A move to unlimited LTE packs will significantly reduce the anti-competitive effect of any form of zero-rating. Already T-Mobile has announced that going forward, only unlimited LTE data packs will be available to new subscribers and I expect the rest of the industry to try and do that as well. So once a telecom operator starts providing unlimited LTE data packs, that is the highest the telecom operator can charge a customer as calls and SMS are already bundled in for free. It only makes sense for telecom operators to maximize their ARPU by moving customers to the costliest available data pack which in this case becomes the unlimited LTE data pack.
As more and more subscribers move to an unlimited LTE data plan either voluntarily or involuntarily, the anti-competitive threat of zero rating will keep getting neutralized. When you have the option to spend as much data as you want on any service then does it really matter if one service is zero-rated and the other is not? For example, will a subscriber on an unlimited LTE data pack have any incentive to watch a show on DirecTV OTT app over Netflix when there are no data cap restrictions in place? I don’t think so. The move to unlimited LTE data will simply make zero rating meaningless for the most part as time passes by.
While it is true that almost all carriers in the USA have a 22GB limit or so on even unlimited data plans beyond which speeds are decreased, it must be noted that this limit kicks in only when someone is connected to a congested cell tower and is known to affect less than 3-4 percent of the subscribers.
Real empowerment for cloud
Cloud computing has played a very vital, if behind-the-scenes, part in the rise of mobile computing. The weather update provided by Google Assistant on your Pixel phone or the movie you are streaming on Netflix, all have cloud computing playing a vital role in some form or the other.
Nextbit, which recently got acquired by Razer, was one of the first companies to sell a cloud-centric smartphone. Nextbit’s primary USP was the intelligent management of your apps and data using the cloud in such a way that you never run out of space on your smartphone. While the USP did make sense, what Nextbit forgot to factor in was that just how expensive mobile data is. Most people with the top carriers in the USA had been paying quite a significant amount for just 5 GB – 7 GB of data, and for them, it made no sense to waste that data on intelligent cloud management and then risk being billed for overages – most consumers would put down USD 100 more and just buy a smartphone with a higher internal storage. While some would argue that Nextbit’s Robin could have been used with Wi-Fi alone, that would kill the entire point of mobility. What do I do if I run out of storage while I am outside and have only LTE to rely on?
However, now that unlimited LTE data packs are more prevalent, Nextbit’s concept starts making a lot more sense. Not just Nextbit, but a lot of other players can also start making full use of cloud computing. Take Google’s Web apps for example. Google has been spending a considerable amount of time in polishing its Web apps and at least some of them are now quite good enough to replace native apps. An unlimited LTE data world would only make Google’s Web apps even more potent. 5G is rumored to have sub 1ms latency and a speed of 1Gbps, if we do not have data caps to worry about then the concept of ‘app streaming’ can finally become a reality. It would no longer be necessary to first download and then install a 500MB high graphics game on your smartphone, with sub 1ms latency, 100 Mbps + speed and unlimited data it would be entirely possible to stream the latest Asphalt game and then forget about it. The app would no longer have to consume valuable internal storage.
If ‘app streaming’ becomes a reality then it would make people more open to trying new apps as the number one difficulty faced by apps these days is to get people to install them. Not just Web apps but other categories of devices will also benefit immensely in an unlimited LTE world. Just think about how much more useful and practical Chromebooks could become were they to come bundled with an unlimited LTE connection from a particular operator for two years. Microsoft’s plan to release a Snapdragon 835 powered device which is running Windows Cloud OS also starts making a lot more sense in a world with unlimited LTE. After all, Snapdragon 835 would be one of the first SoCs to support Gigabit LTE. Combine unlimited Gigabit LTE with Microsoft’s cloud apps such as Office 365 etc and productivity + mobility would truly become a reality.
Boost for video apps and AR/VR
In the short term, video apps will be the biggest beneficiaries of unlimited LTE data. There is no denying that usage of Netflix, YouTube, HBO Go, and the like will see a massive jump as more and more people start having unlimited LTE data connections. In the medium term, I expect AR and VR to benefit a lot from unlimited data. Telecom operators have already been touting AR/VR as potential use cases for 5G which makes sense considering that in order to have a tether-less AR/VR experience it is necessary that all the heavy lifting is done by the cloud which will be helped by 5G’s alleged 1 Gbps speed and also the 1 ms sub latency will help in making sure there’s no motion sickness. The only part that’s missing is unlimited data. No one wants their VR car race game to stop midway or for a space adventure to end abruptly because they ran out of data.
In a way, telecom operators in the US starting to provide unlimited LTE data will help them work out the economics of how unlimited data works and will prepare them better for 5G. Telecom operators in the US have long been accustomed to making money by pushing subscribers to higher data packs or charging overage fees in order to improve their ARPU. Unlimited data packs will provide a unique challenge in this regard and already implementing it with LTE will allow the operators to tweak the model for 5G.
Unlimited data… unlimited changes
I have already mentioned at the start of the article as to how battery and bandwidth are the two limiting factors for smartphones. While the problem of the battery is yet to be solved, the problem of bandwidth seems to be solving itself. The effects of unlimited data can be much broader than is possible to capture in one article. But as the migration to unlimited data happens, the second order effects would either slay some industry giants or give rise to new ones. It is just a matter of time. And that is not unlimited.