Monday, 19 September 2011

MNOs should take a leaf out of the utilities' book on load balancing

As I'm sure you know I've been focusing a lot of attention on smart metering as a major M2M application. Our report from back in May predicted 1.5 billion smart meters worldwide by 2020, up from about 100 million today. One of the major benefits touted is the ability to carry out load balancing on the electricity network. Since it's hard to store electricity efficiently utilities have to ramp up and down generation capacity as demand grows or declines. This is also very inefficient. Smart meters should allow utilities to smooth that demand by reducing the price of electricity at off-peak times, encouraging users to consume at those times and reduce consumption at other times. The aim is not so much to reduce the overall usage (although hopefully this will happen too as people become more aware of how much power they're using) but to smooth out the peaks.

The same is true for mobile network operators. They also have to provision their networks based on peak demand despite the fact that for a lot of the time the network will be underutilised. As a result investment in RAN is typically inefficient. MNOs are rolling out LTE so people can get better speed at the new busy hour but that infrastructure will remain underutilised the rest of the time. I've previously examined (here) the need to focus on particular geographical areas rather than rely on the macro network. But MNOs also need to think about the timing of usage as well as the location.

The key for MNOs is to follow in the footsteps of utilities by spreading demand, rather than just increasing supply. The time of heaviest usage for mobile broadband is 11pm-midnight. And most of the traffic is adult video. I'm not going to speculate on the ability of MNOs to time-shift the consumption of that type of content. That's a thorny subject indeed. I'm not sure a "specialist gentlemen's content" happy hour from 3pm-4pm would really work too effectively. However, other options might include local caching of content, throttling of video content during the busy hour or charging a premium for usage during that time. No easy solutions but potentially a cheap way to better balance network load.

Machina Research's report Mobile Broadband Global Forecast & Analysis 2010-2020 will be published later on this month including our forecasts for the growth in MBB connections and traffic in 54 countries.

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