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Reviews:
 ·Frontier Communi..
| reply to rebus9
Re: hell ye said by rebus9:It's not that carriers CAN'T increase capacity. They don't WANT to spend the money. They use caps to avoid having to invest more quickly in tower expansions.
Because cash is the only thing holding up tower expansions? Construction permits, community relations, and ROI all come into play too. | |
rebus9
join:2002-03-26
Tampa Bay Reviews:
 ·Verizon FiOS
 ·Bright House
| said by Crookshanks:said by rebus9:It's not that carriers CAN'T increase capacity. They don't WANT to spend the money. They use caps to avoid having to invest more quickly in tower expansions.
Because cash is the only thing holding up tower expansions? Construction permits, community relations, and ROI all come into play too. You really think that's what is slowing down tower expansion? I don't.
Existing towers can be upgraded (without permits), existing cells can be split into smaller chunks by swapping in antenna arrays with more narrow fields of coverage, cell sites can be added to rooftops of existing buildings, etc.
Let's not kid ourselves. Carriers would absolutely find ways to expand cell coverage IF there was a financial (or regulatory) incentive for them to do so.
But why spend, when you can just impose caps with expensive overage charges? Greater revenue, less outlay. It's a big win/win for the carriers. | |
Reviews:
·Frontier Communi..
| Setting aside the fact that it's not nearly as simple to split a cell as you think, studies have shown that less than 5% of mobile users consume >2GB/mo. If you were the carrier, why would you spend billions of dollars to upgrade your network, just to meet the needs of such a small portion of your user base?
Keep in mind, your shareholders demand a return on their investment, they will only tolerate so much money being diverted to plant and equipment, particularly when it will only be utilized by a tiny fraction of your customers. It makes perfect sense to impose overages, they both deter heavy consumption, and bring in cash that can be used to fund network upgrades.
Another point to consider is that wireless data is currently a growth market. There is little incentive to compete on price when you have tons of new customers flocking to your product at the current price point. As the market matures the carriers will have to find ways to maintain growth, that will necessitate finding a way to snipe customers from their competitors. The easiest way to do that is to compete on price, though other factors (coverage) are also important. | | |
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rebus9
join:2002-03-26
Tampa Bay Reviews:
·Verizon FiOS
·Bright House
| said by Crookshanks:Setting aside the fact that it's not nearly as simple to split a cell as you think, studies have shown that less than 5% of mobile users consume >2GB/mo. If you were the carrier, why would you spend billions of dollars to upgrade your network, just to meet the needs of such a small portion of your user base? Two considerations to take away from this....
1) If only a tiny minority of users are bandwidth busters, then you don't need caps. Make it a soft threshold, and throttle-back those who exceed it. A few abusive users, throttled back, do not strain a properly engineered network.
2) You don't think that it's a coincidence they put a 2 GB cap, do you? It's the magic line in the sand that "most" users "usually" don't go over. But... they WANT the cap to be near your typical usage, because it's easy for a user to occasionally slip above that limit once in a while. And when that happens, their overage rates are extremely profitable per-byte.
They WANT you to exceed your cap occasionally. But just occasionally. Regular financial penalties woud have users screaming for higher caps. It has to be "incidental" overages. Basically, they've trained users to constrain themselves and to expect the occasional ding on the monthly bill. Remember, you can shear a sheep many times, but you can only skin him once. | |
Reviews:
·Frontier Communi..
| said by rebus9:1) If only a tiny minority of users are bandwidth busters, then you don't need caps. Make it a soft threshold, and throttle-back those who exceed it. A few abusive users, throttled back, do not strain a properly engineered network.
I already said that I like what Verizon did with their 3G network, which is effectively what you're advocating for. Did you not read my post in its entirety?
said by rebus9:2) You don't think that it's a coincidence they put a 2 GB cap, do you? It's the magic line in the sand that "most" users "usually" don't go over. But... they WANT the cap to be near your typical usage, because it's easy for a user to occasionally slip above that limit once in a while. And when that happens, their overage rates are extremely profitable per-byte. I don't think you understand the difference between averages and medians. The last study that I saw had the average data usage somewhere around 700MB, with the median around 400MB. It's only the 95% percentile of users that exceed 2GB, most never even come close. I manage more than 30 smartphone lines at work, and while that's not a large enough sample to be scientific, I can tell you that only ONE of my users regularly exceeds 1GB.
There's no conspiracy here with the 2GB cap. They picked it so it would only impact an extremely small minority of users. Even with the cap, Verizon at least still allows you to backdate plan changes. You'll never pay the $15/GB overage fee unless you fail to monitor your usage. | |
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