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A Wireless Carrier's Challenges in Managing Data Demand

Photo by Fenrry on a Nokia N8

Photo by Fenrry on a Nokia N8

Any mobile device enthusiast will tell you that mobile broadband connectivity is crucial. In fact, Microsoft recently outlined new features in Windows 8 that will make connecting to mobile broadband more seamless and easy than before.

The reality that is hitting many consumers today is that bandwidth cannot be freely had. Data demands grow as the internet richens with multimedia and video streaming services, but at the same time service providers are introducing caps on data. Some service providers pull the reins tighter on their customers, but seldom without a reason. We had the chance to sit in on a Q&A session with Mobilicity, a cell phone and mobile broadband startup in Canada with 18 months the market, at a special event in partnership with HowardForums.

Announced at the event was that Mobilicity will be carrying the Samsung Galaxy Nexus starting February 6. A lucky participant who asked the best question at the event was to be awarded one of these Android phones.

Mobile Data Management

A hot-button issue was the network's data policies, which have come under intense scrutiny as its smartphone customers have discovered that Mobilicity aggressively shapes bandwidth and throttles data. Some users have reported repeatable instances where initial data speeds hit the 2 Mbit speed limit (as set by the carrier) but slow down to 0.05 to 0.15 Mbit after watch YouTube HQ videos on their devices.

Following an investigation by HowardForums, Mobilicity CEO Stewart Lyons revealed the carrier's current policy that if a user consumed more than 100 MB within a 15-minute window, he or she would be tagged for temporary throttled speeds. That works out to be 111 kb/s or 0.888 Mbits/s averaged over 15 minutes. Lyons revealed that this was to stop its customer base from using Netflix on Mobilicity.

Mobilicity also employs a deep packet inspection box to curb BitTorrent usage. Due to the number of ways BitTorrent may be masked, BlackBerry Maps was a false positive and was temporarily banned from use. Current users are also reporting that SSH is blocked, leaving Mobilicity who want to remotely access other machines through that protocol out of luck.

The Competition

Even with the restrictive network management policies, Mobilicity sees itself as having a distinct value advantage over the "Big 3" incumbents of the Canadian wireless market – Rogers, Telus and Bell, all of which also run value-oriented discount brands. Mobilicity often runs promotional plans that offer unlimited calling, texting and data for $40 a month – complete with basic features such as call display and voicemail. A similar plan from the Big 3 (and its discount brands) would run at least twice as much.

Mobilicity isn't the only value-oriented newcomer to the market, however. Wind Mobile, which launched slightly before Mobilicity, also offers similarly discounted unlimited plans in the metropolitan markets of Toronto, Vancouver, Ottawa, Calgary and Edmonton. While Wind is facing similar challenges with data management, and clearly states that it has the right to throttle its users after 10 GB of mobile data, the general consensus among HowardForums users is that Wind has a far more liberal data policy.

Tower Sharing

Howard Chui and Stewart Lyons

Howard Chui and Stewart Lyons

One of the most interesting questions of the night was regarding tower-sharing agreements: Given that Wind also operates on the same AWS frequency, would Mobilicity consider a tower-sharing agreement. Lyon responded enthusiastically, "Love it. Where do I sign?" (At this point, the room erupted with laughter as Howard jokingly suggested that he place a call to Tony Lacavera, CEO of Wind.) Lyons then continued, "All these tower sharing agreements are funny. We're in for sharing towers with anyone. It's funny because the government asks for a tower sharing policy because they really want to see it be successful. [The government] goes to the incumbents and they say 'We offered Mobilicity and Wind tower sharing and they refused', and I shake my head. Why would we ever refuse? Do you know how complicated it is to build a tower with city approval? We would never say no. It's a nonsensical argument.

"If anyone wanted to share a tower with us, provided that we could use the tower and it's in a good location for a site, we would say yes. In fact, we have not shared a lot of towers to date, probably less than 10 towers shared to date across the country. We build predominantly on rooftops. If a tower came up, absolutely, because towers are usually at great heights and good locations – we'd probably say yes in a second."

For reference, Bell and Telus pooled their resources together to launch an HSPA network, allowing it quickly catch up to Rogers in having an iPhone-compatible 3G network. Wind and Mobilicity are building their networks out independently, with Ericsson handling the duties for Mobilicity and Huawei for Wind. Ericsson also manages the network for Sprint and provides equipment to T-Mobile.

Decisions on Limited Resources

Ericsson engineers at the discussion revealed that tweaking a network is a constantly evolving task. Changes have to be made to tower and network configuration through the seasons, as the presence or absence of leaves on trees can affect how cell phones interact with towers. The engineers likened the challenge it is facing right now with its data demand against cell capacity to a glass of water, which can only hold a finite amount before you need another container.

The fact is that building a network is expensive. In response to a question regarding cell coverage in Toronto's PATH – a 28-kilometre (17 mi) system of pedestrian underground tunnels that connect together much of the downtown core – Lyons revealed that management wanted "multiple" 7-figure dollar range in fees just to install repeaters. Instead, the company is looking at an alternative way to cover the underground retail network. The Big 3, as well as Wind, currently offer cell coverage in the PATH.

The impression given by Mobilicity management is that it has made tough choices based on a limited budget, with the sacrifice on PATH coverage being a prime example. Lyons further explained that resources that would have otherwise gone to expanding Mobilicity's coverage footprint have been diverted to adding more capacity in high-demand areas.

While Mobilicity's may still be a small carrier in a limited number of markets, its challenges are no less real than what the likes of AT&T or Verizon face. Data demand is growing and keeping a consistent level of service that's fair to all customers is a huge challenge. The introduction of the iPhone on AT&T opened up a whole new dimension of data demand on AT&T, which exposed the weaknesses in the strained networks of New York and San Francisco. AT&T has since made significant improvements, but it hasn't help it a secret that it's had to come up with throttling policies for data hogs.

The Top 1 Percent

We've heard numerous times from those in charge of internet providers – both mobile and hardline – that a small percentage of users is responsible for the majority of bandwidth consumption. This appears to be a consistent plight expressed by all providers, and thus far dealt with by either throttling policies or hard caps.

During the Q&A session, our very own Jane McEntegart posed the question whether or not Mobilicity has considered creating tiered levels of services so that customers can choose between unlimited but throttled data versus a smaller allowance at full speed – especially in light of the report that says that the top 1 percent of mobile data users consume half of all traffic, and the top 10 percent consume 90 percent of the world's mobile data. (Incidentally, her question was unanimously chosen as the winner for the Galaxy Nexus, but the prize was taken away from her due to not being an active HowardForums user or Mobilicity customer.)

"Absolutely. We're only halfway through what we want to do with data. We've talked about a few things to do with speeds and that's something we want to look at," Lyons responded. "That question is one that's being pondered by CTOs all over the world. This is a very current and serious issue. It's very hard for networks to keep up with demand. There's an insatiable demand for data out there, and it's much harder on the wireless side, as we're confined by things such as spectrum."

"It's a challenge for all the networks out there. I've traveled the world; I'm originally from Australia, but I've worked in England, Egypt, Canada, Sweden. The phenomenon of the smartphone made a big impact on the network capacity. Every time you switch on that handset, it's polling the network. Before, it didn’t do that," explained Christian Lundgren, head of operational assurance at Ericsson. "When it was just a voice network, it was simple; we could calculate things a lot easier. Facebook, HowardForums, they're constantly sending pages out to your handset. Facebook is one of the biggest ones; it is literally connected to the network at all times, even when you're sleeping. We don't realize it, but from a signaling perspective, it's checking your Facebook account to see if there are new messages. The phenomena of all these apps on the smart handsets have really had a significant impact on how you dimension and plan the network."

Smart people or Smartphones?

A Mobilicity store in Toronto's Chinatown

A Mobilicity store in Toronto's Chinatown

On more than one occasion, Mobilicity management stated that its products and services are for smart people. In fact, the company's slogan is "Now that's smart." The likely question right now on present customers' minds is whether or not the network is for smartphones. Time will tell, but in any case, customers will always win where there are more choices and competition on the market.

For a full rundown of the Q&A, check out HowardForums.

Read more from @MarcusYam on Twitter.

  • computernerdforlife
    Simply put: infrastructure is a part of these companies. Invest more in bandwidth, less problems. Invest as little as possible, like they are doing now, consumers will make fun of your company. For the record, it's not the government responsibility for YOUR coverage.
  • wardler
    Anyone who believes this $%^& about there not being enough bandwidth is throwing money at these cell companies for nothing. I have talked to so many telecommunications experts (usually people who work for the cable, telco, and wireless companies) and they tell me the real problem is keeping people's speeds under what they are paying for.

    Everything should be absolutely unlimited until we down their network IMO. Let's see what the real cap is.
  • wardler
    Anyone who believes this $%^& about there not being enough bandwidth is throwing money at these cell companies for nothing. I have talked to so many telecommunications experts (usually people who work for the cable, telco, and wireless companies) and they tell me the real problem is keeping people's speeds under what they are paying for.

    Everything should be absolutely unlimited until we down their network IMO. Let's see what the real cap is.
  • jawadshuaib
    It is a catch-22 problem. Investing in infrastructure requires a lot of capital, which requires existing customers. But for a new entrant, there are no enough customers to take on this sort of expansion. The government should perhaps subsidize part of the investments required.

    Jawad S
  • jacobdrj
    I can TOTALLY see some company with a bunch of capital (google anyone?) who can invest in their own data-only network. Use the latest radio technology, and then have users be subscribed to some skype/oovoo/google voice type service for talk-time and sms... Give users what they want: Lots of data at high speeds...
    The biggest catch is the lack of available of spectrum... But it was my understanding that old-school SDTV Chanel spectrum was practically unused...
  • ivyanev
    Back in the days when first broadband internet appears, the speeds were 100-200 kbps, which was OK.But it happened that the company was having problems with user accounts, so everybody had to use the same speed for some time.The most interesting thing happened-speed was up to 8 MBytes per second.They didn't change their network for a night, so the bandwidth was there ,just hidden. My point here is that i just don't believe the company they have bandwidth issue.
  • aftcomet
    As a consumer, I'm willing to be conservative with the network as long as I'm seeing progress. But here in Canada, we have such a large monopoly on telecommunications (internet, mobile, etc) that we're being left in the stone age. Our internet service is laughable considering the prices we pay and the service we get. Our internet is capped at 100GB on average. They'll sell you a 100Megabit connection for $150 a month, but put a 75GB cap on it which essentially makes it useless. Hell we still have half a megabit plans (some countries have faster phones than this) for $35 a month.

    I find these companies in Canada are taking their sweet ass time in upgrading. The internet and mobile communication become a necessity in life that you can't go without it. Therefore if you're not happy with the big three here, there isn't much you can do except cancel, or switch to a inferior service that doesn't fit your needs. There is no competition.

    Instead, we have the CRTC here. When big executives from Rogers, Bell, and Telus retire, they sit on this board which governs telecommunications policies. Of course they condone business which preserves the existing monopoly because after all, they have to protect their stocks in these organizations.

    And it's all our government's fault whichever way you look at it. If you're going to allow something to be privatized you better as hell make sure many companies have access to the business, otherwise what incentive does a single organization with a monopoly in a necessary service have to improve it?
  • razor512
    there is no bandwidth issue that requires a cap on the amount of data transferred because networks are not limited in that way. A network is limited by the hardware in terms of transfer speed, which is why an ISP will sell tiered speed.

    if they don't oversell the service, then everyone can use their full speed 24/7 with no issues

    caps on data transfered are false advertising because they allow ISP's to advertise high speeds but indirectly block services that can take advantage of the speeds.

    also much of the current bandwidth issues for ISP's who want to avoid upgrading their network, are based on future projected use and not current use

    I have beta tested 3g modems and contacted some of the developers during the test. They told me this about 3 years ago, most of the poor performance is intentional and due to ISP's wanting to have the same average transfer rates for each node that is connected to the backbone so when they add a new one, they know exactly how much bandwidth will be used at the high end.

    depending on what test is needed, a company can apple to have a select few devices to be exempted from all caps on both speed and transfers (only being subject to the best effort that the network will do be default), giving users in the beta a solid 9mbit/s all the time even for me in NY while other 3g devices, such as my friends iphone would do 2mbit/s in the morning, then drop to near dialup speeds in the afternoon

    anyway, ISP's have a lot of left over network capacity and their only issue is their estimated of future traffic finally exceeding the transfer rates of their current equipment, forcing them to spend a lot of money upgrading

  • mdillenbeck
    As a consumer, my frustration comes when they advertise data intensive applications as a typical use for the phones they wish to sell - then they turn around and base usage limits based on several year old technology with very different data usage profiles.

    To me its like going to buy a sports car that includes one free tank a month of special fuel, then finding out they decided only to put a 1 liter tank in it. Sure it might have mind-boggling acceleration, a top speed that blows anything else away, and tons of extras... but what good is it if you can only drive it for 5 miles a month? (Assumption: special sports car = lots of money to buy.)
  • therabiddeer
    Somebody get Jane that phone, she was robbed.