Mobile Cost Per Bit Has to Keep Dropping

Mobile networks increasingly must be built to support cost per bit metrics very close to fixed networks, something that might in past decades have been thought impossible. And they must do so because the dominant driver of bandwidth consumption now is video, the media type with the lowest revenue per bit implications for most mobile operators. 

In other words, as a practical matter, lower costs per bit are a necessity as traffic shifts overwhelmingly to video content, forcing operators to supply ever-more bandwidth, but earning little additional revenue, if any, as consumer propensity and ability to pay are constrained. 

source: Ericsson

In past years, mobile cost per bit has been an order of magnitude to two orders of magnitude higher than on fixed networks. That becomes a big business issue as consumption on mobile networks begins to resemble fixed network levels (especially for 5G fixed networks that compete directly with fixed networks). 

Verizon executives have noted that they have been slashing mobile cost per bit by as much as 40 percent per year. At such rates, it is conceivable that mobile data costs, in many cases, could be as little as 10 percent of 2018 costs, clearly an order of magnitude reduction. 

In 2010, for example, U.S. mobile data costs in some cases were as high as $25 per gigabyte. By 2015, mobile data costs had dropped to perhaps $5 per gigabyte. Since then, costs arguably have declined further, and should continue to drop in the 5G era as well. 

source: 5G Americas

There long has been a huge disparity of orders of magnitude between revenue bit bit earned for texting, voice, internet access or video subscription services. 

Text messaging has the highest revenue per bit, possibly six orders of magnitude higher than internet access, in some instances, in Europe. Mobile voice revenue per bit is perhaps two to three orders of magnitude higher than internet access, in Europe. 

Subscription video sold as a managed service might have revenue that in principle is higher than internet access at modest levels of usage, or lower revenue per bit at high levels of usage. 

source: 3G4G blog

The big takeaway is that the relentless drive to reduce mobile data cost per bit is mandatory if mobile operators are to support growing mobile data consumption under conditions where consumers really cannot spend much more as they consume more data.