compressing costs and bandwidth

7/29/2019 Compressing Costs and Bandwidth

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Savings as big as Europe

Smartphone use in Europe has reached a tipping point, with over half of mobile

phone users in the top ve European markets now having a smartphone in their

hands. This has been a boon to carrier revenues as the mobile phone companies

can typically charge more for smartphone data plans, and smartphone users

tend to consume more data.

By last October, the number of smartphone users jumped by 13 percentage

points to reach 54.6 per cent of all mobile phone users, in ve major EU markets

(France, Germany, Italy, Spain and the United Kingdom). This Comscore data

understates the popularity of mobile devices, with the recording period endingbefore the latest holiday season.

Europeans are well on their way to their goal of universal broadband access by

end 2013 and they like it mobile. According to the European Commission, 97.5

per cent of all households in the EU had access to at least one xed broadband

network by mid-2012 and 94 per cent had wireless coverage. Just under half of the

population, 47.8 per cent, had an active mobile SIM card and most of this

group, 38 per cent of the population, had these cards in their smartphones.

Compressing

costsandbandwidth



Counting the costs

Within the European Union, geography matters when it comes to smartphone

popularity and data consumption. Sweden has over 100 per cent penetration and

the lowest use levels are in Hungary and Belgium at 19 per cent and 28 per cent

respectively.

Not only do Scandinavians have smartphones, they really use them. The

average Fin used over 2GB/month during the second half of 2012. In nearby

Sweden, the average smartphone user was more restrained at just over 1GB/month.

Europe has a substantial advantage over the United States when it comes to the

cost of bandwidth. According to Wireless Intelligence, G/LTE data costs $2.50 per

GB on average in Europe, around half the global average of $4.86. In Sweden, users

can pay as little as $0.63 per GB per month, a fraction of the $7.50 per GB charged

by Verizon Wireless in the United States.

However, the range of prices between individual European countries is substantial.

Europeans can pay between 8 and 78 a month to use a smartphone with aminimal 2GB data allowance and 200 minutes of phone calls. Access to cheaper

rates is closely tied to market structure not careful shopping. According to Finish

telecom consultancy Rewheel., customers will pay an average of 140 per cent

more for their smartphone use if there isnt an independent mobile network

operator present or where one of their E5 Group is.

A question of volume and speed

Mobile phone operators are under pressure. While total revenue is growing,

the average monthly revenue per connection is declining in most countries

according to Ofcom . And as they invest in new networks, they are also faced with

declining revenue from traditional moneymakers such as ringtones, wallpapers, and

paid apps. In response, they are doing more than setting data limits; they are also

factoring broadband speeds into their pricing structures, with customers paying

more per GB as the connection speed increases.

Compress data, not your lifestyle

Going over the data limit has a cost in both time and money for consumers. Oncethe limit is crossed, operators will sometimes throttle the bandwidth to power users

or charge them a supplementary amount for their extra consumption. But, there

are ways to reduce bandwidth consumption without crimping smartphone use.

One simple way is to use Hotspot Shield VPN.

The data compression function in Hotspot Shield VPN reduces bandwidth

consumption by up to 50 per cent. This feature is an integral part of the VPN and

is automatically activated whenever using Hotspot Shield. Users can even set the

level of compression, trading off some image quality for greater savings.



Marginal savings add up

In just its rst year 2012, Hotspot Shield saved its users 60 million MB of

bandwidth all without limiting their smartphone use. Given the range of European

bandwidth costs, it potentially saved users the equivalent of $40 million to $150

million in additional bandwidth charges see gure one. And the company is

poised to more than quadruple those savings in 2013.

Figure 1: Total savings [MB] during 2012

However, actual savings to customers could have been much greater because of

the marginal cost of crossing over the data limit. After exceeding the data plan limits,

the additional GBs of broadband used are often charged at a much higher rate than

for the data under the limit.

I. Europes Information Society How much do you pay when you use your mobile phone abroad?II. Rewheel research 2012III. The E5 Group consists of Vodafone, Deutsche Telekom, France Telecom, Telefonica and Telecom ItaliaIV. Ofcom CMR analysisV. Report: Mobile challengers needed to drive down data prices in EUVI. Analysis: European LTE operators look to new pricing strategies to boost mobile broadband revenues

Source: AnchorFree Data Analysis Compressing costs and bandwidth

compressing costs and bandwidth

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