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Why networks are becoming ‘just data pipes’

Johannesburg - A Fin24 user has explained why he thinks networks are just becoming all about the data.

Fin24 user Kenneth Burke has written this opinion piece about his views on local and international networks and the changes they're undergoing.

What is your view on how networks are changing? Read the below and tell us your views by clicking here.

The cellular networks in South Africa are bleating about so-called OTT (over-the-top_ services like WhatsApp. In reality, it's inevitable that the cellular networks become commoditised data pipes.   

The days of circuit-switched voice calls are numbered.  Paying for voice calls is already almost extinct in mature markets.  It seems that the main reason for having mobile data is to be able to use GPS navigation apps on the move.  In the UK, for instance, one generally pays only for mobile data. Voice calls and SMS text messages are almost free.  So, a £10 pre-paid bundle includes 500MB of data, 200 minutes of calls and unlimited text messages, and the loyalty incentive adds extra data or voice call time every third month.  In some cases, that sort of package is discounted to just £5 per month.

As Wi-Fi becomes ubiquitous, many people are doing the majority of their communicating via Wi-Fi. I have read that in places like Mamelodi, it's not unusual to see people standing on the streets accessing the free Wi-Fi. It's even more so in the developed countries. When one is connected to the internet via WiFi on mobile devices at home, at work and on buses and trains, a cellular phone or tablet becomes mainly a WiFi device.  Admittedly, unlimited broadband is still not the norm across South Africa, and with the high rate of copper cable theft, there is still a gap for the cellular networks to sell mobile data for businesses and homes to connect to the Internet. When you have massive bandwidth via cabled broadband, be that copper cables or fibre-optic, and the majority of businesses and residences have unlimited (uncapped) Internet access, WiFi achieves a critical mass by piggybacking on the already available bandwidth.

For a given chunk of frequency spectrum, there's a limited amount of data bandwidth.  That's especially problematic in the big cities. So the cellular networks are pushing to offload as much data traffic (and even voice traffic - e.g. Three's WiFi calling App) as possible onto Wi-Fi hotspots in order to overcome degradation of their overall service.   And that is speeding up the commoditisation of data and making the "phone number" increasingly irrelevant.  E-mail addresses are the new way of linking services. So your "phone number" is the same for eBay, Amazon, Facebook, Skype, WhatsApp, Viber, PayPal, and so forth and does not depend on the MSISDN (the subscriber phone number) that the cellular network uses to identify a mobile device.

In the interim, the South African cellular networks can and do still charge a premium for voice and SMS that their peers in the developed world no longer can.  A package equivalent to Vodacom's Red unlimited data/voice calls/SMS texts costs half as much from Vodafone UK, taking the exchange rate into account.  

Bleating about WhatsApp or Viber (or any of the VOIP options) getting a "free ride" is pointless. The networks need to adapt to the realities and deal with the inevitable commoditisation of their expensive infrastructure and frequency spectrum to mere data pipes.

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