There almost always is an 80/20 rule in life and nature. Also known as a Pareto distribution, the 80/20 rule appears in business life, or in life, generally. Basically, the theorem states that 80 percent of results come from 20 percent of the actions.
The Pareto distribution applies to business performance, It seems to apply to telco capex. As applied to mobile network traffic, Ericsson points out that half of all mobile network traffic comes from 20 percent of the mobile sites. Conversely, half of all sites represent just 15 percent of total traffic.
About 20 percent of traffic is generated at just five percent of all sites.
One whimsically asks why we bother with all the other operations, if 80 percent of profits, for example, are generated by 20 percent of customers. As one example, 80 percent of sales come from 20 percent of clients. There are many practical reasons why tier-one service providers cannot focus only on the 20 percent of most-profitable customers. Regulators might require, as will customers, that coverage and service be universal.
So even if half of traffic comes from just 20 percent of sites, the ability to sell service at all will require network coverage across nearly 100 percent of the geography, one way or another. As a practical matter, service providers with full coverage will have an easier time marketing and selling than service providers than have less coverage.
On the other hand, traffic statistics such as these also explain why use of millimeter wave frequencies makes sense for capacity: it obviously should be used at the five percent of sites that generate 20 percent of demand, plus the 15 percent of sites representing 30 percent of demand.
Whether it will generally make sense to deploy rapidly--or ever--across half to 80 percent of the geography is the issue.
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