30 Times More Data In Fixed vs. Wireless Neworks And Slowing Data Growth In Wireless

Once a year many telecom regulators in Europe publish their yearly analysis of the state of competition in the telecommunication market. A while ago, the German regulator has published it's report for 2012 (in English) which contains, among many many other interesting numbers, the amount of data transported through fixed in wireless networks in Germany.

As per the report, 4.3 billion gigabytes of data were transported through fixed line networks in Germany in 2012 (page 77) compared to 0.139 billion gigabytes (or 139.75 million GB to sound more impressive) in wireless networks (page 78). In other words, there's 30 times more data flowing to and from fixed line connections compared to wireless.

According to the report there are 28 million fixed line Internet connections in Germany today and thus the average monthly amount of data per line is around 12 GB. Also interesting is the rise of fixed line data from 3.7 billion to 4.3 billion gigabytes from 2011 to 2012, that's a rise of 16%. In wireless networks the amount of data transferred rose from 93 million GB to 139 million. That's a 30% rise which is quite substantial but far from the doubling or tripling the year before and the year before that respectively. In other words, the growth has been slowing down for a number of years now.

The report further says that there were 139 million mobile subscribers in Germany in 2012 out of which around 40 million are actively transferring data (page 79). This made me think a bit. I pay around 40 euros a month for my fixed line Internet and telephony connection today and around the same amount for wireless connectivity. And while the fixed line is shared, every family member has an individual mobile contract. So in effect I pay less for my fixed line connection when broken down per user compared to my wireless subscription and on top transfer over 30 times more data over it. Or put the other way round I pay more for my mobile subscription then for my fixed line and use it far far less.

All of this makes sense if wireless networks are more expensive to build and maintain than fixed line networks. But is it really cheaper to drag a fiber cable close to people's homes these days and then have a copper wire to each individual house or apartment compared to setting up a base station on a rooftop that servers one thousand users? I have my doubts.

5 thoughts on “30 Times More Data In Fixed vs. Wireless Neworks And Slowing Data Growth In Wireless”

  1. Wireless networks _are_ substantially more expensive overall than fixed networks. Building the fixed per capita is obviously more expensive (but not as much more expensive than you’d think) but the running and maintenance costs are far, far lower.

    I’m not sure what your argument here was though; if you argue all our broadband needs could be fulfilled with wireless networks, simple laws of physics and lack of spectrum will show you that won’t happen.

  2. The high cost of mobile networks is in the civil engineering and operations and engineering staff not in the radio and electronics. The opex for the fixed line portion of a telco vs the mobile portion is less perhaps maybe fixed line is easier or fixed line operations have a head start in managing their services while up to recently mobile has been more of “get it done, regardless of cost” operation.

  3. Two remarks:

    1) Modern mobile networks increasingly rely upon a large number of base stations for relatively small cells (to deal with capacity, throughput, high-rise buildings, subways, etc). All of them must be connected to a backhaul network. The deployment of wireless is therefore not as straightforward as it appears at first, and is therefore a costly endeavour.

    2) The price at which services are sold to end-users is always very, very partially linked to production costs themselves. In fact, market characteristics and commercial considerations determine the price “that the market will bear”:
    degree of competition amongst operators (less competition => higher prices)
    availability (more mainstream => lower price)
    substitutability between wireline and wireless (more substitutable seamlessly => lower price)
    convenience (more convenient => higher price)

  4. How much of this difference is due to data compression by wireless providers? It may be more useful to compare the respective number of video downloads over wired vs. wireless, rather than the bytes.

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