"Fake 5G" and Real Demand

Most discussions of bandwidth for consumer apps are a matter of overkill. Observers complain about “fake 5G,” “slow internet speeds” and “high prices” for internet access. There are some geographic areas (mostly rural, but including some parts of cities, apparently) where absolute speed is an issue.

But most of the time, speed does not prevent people from using all the apps they want, with acceptable user experience. The reason is simply that most apps require very little bandwidth, and that the key variable is simply the total number of simultaneous users or devices.

Generally speaking, 20 Mbps per user or device is quite sufficient.

Number of devices	Use Cases	Recommended Download Speed
1-2	Web surfing, email, social networking, moderate video	Up to 25 Mbps
3-5	Online multiplayer gaming, 4K streaming	50 - 100 Mbps
More than 5	All of the above plus sharing large files and live streaming video.	150 to 200 Mbps

source: Toms Guide

The evidence that most users require relatively modest bandwidth (20 Mbps per user, for example), comes in part from actual consumer buying behavior. As a recent survey of small rural telcos shows, consumers do not generally buy the fastest-available tier of service.

Even when gigabit connections are available, few consumers buy them. Among rural telcos offering internet access, some 23 percent of all connections made available by these rural service providers offer at least a 1,000-Mbps connection. Yet only two percent of actual subscriptions are for gigabit services.

Another 34 percent of connections offer speeds from 100 Mbps to about 999 Mbps. Yet less than 14 percent of customers buy such tiers of service.

Source: NTCA data , IP Carrier analysis  

Some will lament the fact that even when gigabit (or any other very-fast) internet access service is available, most consumers do not seem to buy them, when there also are choices of other services that cost less, but are not as fast. In other words, there typically is some gap between the availability of a service and consumer willingness to buy.

One logical conclusion is that people find the services they buy suit their needs, and that many consumers see relatively little additional advantage to buying a gigabit or other very-fast tier of service.

In the United Kingdom, for example, 94 percent of U.K. homes and businesses are in areas where fixed network broadband operating at 30 Mbps or faster is available, according to Ofcom. In such areas, just 45 percent of homes buy a service operating at 30 Mbps or faster.

In other words, only half of customers will buy services of 30 Mbps. And yet in other markets, such as the United States, where some observers decry the “slow speeds” and “high cost” of internet access, the same results are seen. Most consumers choose not to buy gigabit services.

And such data underscores an “iron law” of the consumer connectivity business. People are only going to spend so much for connectivity services. And in many markets, we have long passed the point where actual speed was an impediment to user experience.