Low-cost bandwidth has become a strategic imperative for mobile networks for several reasons, including the primary need to support video entertainment. Indeed, it would not be unfair to argue that advanced mobile networks are designed precisely with video bandwidth as the primary driver of capacity planning.
The reason is simple and straightforward: video is the most bandwidth-intensive consumer application, by far. Text messaging and voice require use of almost no bandwidth, while video consumers nearly two orders of magnitude more capacity, for each minute of use.
H.264 Skype video conferencing, for example, uses four orders of magnitude (10,000 times) more bandwidth than Skype messaging, for example.
So revenue per bit and data consumption are inversely related: video consumes the most bandwidth, and produces the lowest revenue per bit for a connectivity provider, while text messaging and voice use the least bandwidth and produce the highest revenue per consumed bit.
Internet traffic is in between, with some apps consuming little capacity (email), some apps consuming a moderate amount of capacity (web browsing) while others are heavy capacity consumers (video). But networks always must be designed for peak usage and demand, so networks now must be dimensioned for video consumption.
And that means getting cost per bit metrics down by an order of magnitude, at least. Mobile networks have had cost per delivered bit an order of magnitude (10 times) higher than fixed networks, as well. In an era where 70 percent of traffic is video, revenue per bit becomes a major issue. That is especially true when the video is supplied by third parties, generating no direct revenue for the connectivity provider.
