Over the past decade, mobile networks around the world have grown and matured. The International Telecommunication Union (ITU) estimates that more than 87% of the world’s population is currently covered by at least 4G Long Term Evolution (LTE) (or similar) networks. Similarly, we are seeing dramatic changes to smartphones. In 2019, mobile devices surpassed computers as the preferred online access method, accounting for more than half of daily online time (Global Cohort). Mobile has grown from just 25% of his daily time (in 2013) to the primary mechanism by which a user can now spend 57% of his time online (Q4 2022). Mobile connectivity is an increasingly established ‘fixed’ service, now established as a cornerstone of modern lifestyles.
When consumers choose to spend more time with a product or use case, they are, to some extent, expressing their preferences. In other words, time (as a unit of measurement) can be thought of as a proxy for the utility that individuals assign to goods and services. There are a finite number of hours in a day, and in theory, people are constantly optimizing them to maximize utility. As mobile phones have become the preferred medium for accessing the Internet, this behavior is uniquely preferable (maximizing utility) for users compared to previously existing or available alternatives. you need to accomplish things.
The challenge for any industry is to clearly understand the relevant use cases and find ways to express value creation in a way that resonates. For example, in the early days of circuit-switched telephone networks, it was wise to use “hours” to represent costs because the time a user spent occupying a line was directly proportional to whether the line could be monetized. (because he is the only user). circuits can be used at once). It was also easier for consumers to recognize time as a unit that was billed (for example, $0.10 per minute) and as a unit that was consumed. These units can be sold in large quantities to represent value (for example, 1000 minutes for $50). The telecommunications industry will continue this trend, with similar unit-based pricing (for example, $5 for 500 texts) leading to widespread adoption of text messaging.
With the deployment of 4G LTE networks, these packet-based Internet Protocol networks have become data-centric. Coupled with advances in consumer electronics (such as the first Apple iPhone), there was suddenly much more that could be done with cellular networks than simple conversations and texting. As a result, consumer wireless unit economics have shifted to data metering (e.g. $10/GB, $30 for 5GB). On the other hand, the unlimited access granted by fixed-line home broadband has led to throughput (or data rate, e.g. Mbps) as the primary method of differentiating different access product tiers.
Different product tiers and pricing allow end users to go about their business optimizing and maximizing their utility. In other words, a “quantity of demand” for goods and services is created.
