Mobile network traffic tends to be highly asymmetrical, resembling a Pareto distribution, commonly known as the 80/20 rule. Telecom service provider revenue and profit illustrate how Pareto applies in the business.
According to Ericsson, five percent of cell sites support 25 percent of total traffic. About a quarter of sites handle half of all traffic, while 70 percent of sites are required for 25 percent of total traffic.
“The top 30 percent of sites--including high- and medium-capacity sites--in the network account for 75 percent of the total traffic, whereas the bottom 70 percent of sites carry only 25 percent of the total network traffic,” Ericsson says.
Other studies confirm the pattern. Looking at usage on a given day, by any single user, perhaps 80 percent of traffic is carried by just three towers. About half of traffic is carried by one tower. The remaining 20 percent of traffic is carried by 28 additional cell sites.
The traditional rule of thumb for revenue and profit for fixed networks in the U.S. market is that service providers make money in urban areas, break even in suburban areas and lose money in rural areas.
That also seems to apply for mobile networks, where arguably most of the value to consumers, and therefore the bulk of “revenue,” is earned from a handful of cell sites on most days. Just 30 percent of total cell sites support 75 percent of usage. That is a Pareto distribution, for sure.
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