Mobile: Voice vs Data

watty

I have long pointed out that for your €15 to €20 typical voice or Data, that the data is stunning value.

Voice is about 12kbps symmetrical per call. You get maybe 50 Minutes. That's 72Mbits, or 9Mbyte traffic a month. They only really pay for calls leaving their own network, many don't. They pay "Termination" charges to other networks, but if the charges for all networks are the same and you get as many inward calls as outward, then the only real cost is traffic on their own network.

In UK Termination charges are to become similar and much lower
http://www.theregister.co.uk/2011/03/15/mobile_termination_fees_ofcom/

In contrast on Data, virtually ALL the data has to enter or leave the Mobile Network. How many web sites does O2, Three, Meteor (some via Eircom web maybe) or Vodafone host? Hardly any Mobile Internet traffic. All that data entering or leaving the traffic has to be paid for. Between 10Gbyte and 30GByte on most €15 to €20 contracts.

That's almost 1000:1 difference in traffic for same price.

Either Data is subsidized or Voice is grossly overpriced.

SMS by the way costs almost nothing on the same network. Inter-network costs are artificially high.

watty

Update

Mobile should not keep 900MHz. They will offer NOTHING extra on it, simply reduce their 3G operating costs. They may even reduce over all Network Data capacity

http://www.theregister.co.uk/2011/03/15/ofcom_3_900mhz_squeeze/

Three in UK isn't getting enough voice traffic:

Russell [of Three] said that 97 per cent of traffic on his network is now data – Three carries half of the UK's mobile data traffic and sells more iPhones than any other operator.

clohamon

watty wrote: »

That's almost 1000:1 difference in traffic for same price.

Either Data is subsidized or Voice is grossly overpriced.

Probably both.

3's 2009 UK accounts show a small trading profit of £80M. But with depreciation and an annual allowance for the licence fee, it turns into a loss of £327M.

Then there is the £10.3Bn interest free loan from its parent. Annually that would be worth another £300M at least. All told, a true loss of more than £600M.

So it seems that its possible to make a profit on a mainly data 3G network so long as you don't have to pay for a license, or replace obsolete equipment or invest in customer acquisition or build the network.

As for voice, I think they know thats where the cream is.

Forecast revenue growth and profitability are driven by a combination of new customers and improving operating margins driven in part by a change in the mix of voice and data revenue and operating efficiencies expected to be achieved through the network sharing agreement with TMUK

Annual accounts 2009 p22

watty

How long can 3 keep losing money here? In Ireland they have a worse ratio of Voice to Data.