Mobile broadband is no fibre killer

It still amazes me how quickly respected industry commentators join liberal politicians in questioning the need for Fibre-to-the-Home (FttH) in the wake of the enormous success of mobile broadband.

They refer to this phenomenon as proof that people are bypassing their fixed broadband and are now using the smartphones and tablets to obtain most of their broadband access. However, after several years of mobile boom the majority of households – and all of Australian businesses – are still using the fixed-line networks for calls, and most certainly for broadband access. Around 85 per cent of households are still connected to the fixed network, and in the case of businesses this is close to 100 per cent.

This situation is replicated throughout the developed world, which makes it pretty clear that the majority of the global consumers and businesses are making choices contrary to the claims of the NBN naysayers.

An analysis of mobile broadband usage actually makes things even more interesting.

Most heavy broadband use on smartphones and tablets takes place in homes, offices, airports, schools, universities, internet cafes, etc, and in most of these situations the WiFi networks are used for this, not the mobile networks. All of these WiFi modems are linked to the fixed network.

The increase of broadband access from tablets and smartphones will increase demand for fixed broadband access, and so the enormous appetite for mobile broadband will only increase the need for a FttH network. We at BuddeComm have consistently reported on the impressive progress of mobile broadband, but we have also highlighted the access problems to these networks, even from spots within the CBDs of Sydney and Melbourne. It is not for nothing that the telcos are going to spend some $5 billion to renew and buy new spectrum licences. If they did not need the capacity they would not fork out that kind of money.

At the same time we see mobile operators bringing in more caps and differentiating their plans in an effort to manage their network. Australia has always had capped mobile prices, but other countries did not; now, however, operators in America and Europe are introducing capped pricing and throttling usage down – and asking for more money if you want to use more, clearly illustrating the problems that exist around mobile capacity.

This means that the more broadband you use over the mobile network the more you will pay. On the other hand, FttH doesn't have such capacity limitations and these networks will always be much more price-competitive. So, even with the next generation of mobile networks (LTE), the majority of users will continue to use their WiFi networks to download content-rich applications onto their mobile phones, tablets and laptops.

It could even be argued that smartphones and tablets are becoming the killer apps for the FttH networks and this will become more apparent with the new WiFi devices that are coming onto the market as we speak. The WiFi technology market is booming, and with more wireless devices in the home – and with people using them in different rooms at the same time – there is an urgent need for better WiFi connectivity. This will be provided by the new GigaBit WiFi technology, which will rapidly be implemented in tablets, smartphones and laptops and via in-house WiFi modems and repeaters.

Given what this will do to broadband capacity requirements in the house, even the most committed naysayer must be experiencing at least some doubt regarding their fundamentalist position on the issue.  

Paul Budde is the managing director of BuddeComm, an independent telecommunications research and consultancy company, which includes 45 national and international researchers in 15 countries.