Chapter 3 Can Demand Grow Indefinitely? Volume Versus Speed Demand for mobile services is typically measured in monthly data volumes—a metric of the quantity consumed. However, the discussion so far has suggested that the key reason for introducing new generations of mobile technology is speed. This chapter discusses how capacity and speed are related before considering the likely growth in demand for both speed and data in 5G deployment. A simplistic approach might assume that there is no relationship between speed and data. For someone who wishes to download an attachment or a video, the volume of data is unchanged regardless of speed—it just takes longer on a slower connection. In practice, there is some correlation. Users will only attempt certain activities, such as streaming video, when the data rate is high enough. Hence, once they pass certain thresholds, higher data rates tend to trigger step-changes in demand. MNOs have observed this effect by noticing that data demand tends to rise significantly as subscribers who have moved from 3G to 4G get faster and more reliable data. However, it might be expected that, once speeds are availablebeyond those needed for data-intensive applications, the link between speed and demand would again fade away. New generations of mobile technology typically aim both to: 1. Provide higher data rates in order to improve the user experience. 2. Provide more efficiency in terms of throughput per unit of radio spectrum to allow networks to carry increased traffic. This chapter considers the extent to which this is needed in 5G. What Speed Is Needed The data rate that is considered acceptable has progressively grown over time. As higher speeds have become possible, application providers have delivered new services, driving the demand for these types of speeds. For example, once speeds rose above 1 Mbps, delivery of video content became possible, spurring a huge growth in demand. This then led to the delivery of higher resolution video services, which again spurred demand. Determining how much speed is “enough” is problematic. The speed that is sufficient at a given point in time for the services typically consumed can be calculated. New services may be devised that result in a greater demand for speed, although this is tempered by the fact that apps are increasingly being developed for a global market. China and India are far larger markets than Europe but have lower speeds of connectivity. Hence, even if very high speeds are provided indeveloped countries, the focus of app developers may nonetheless be on lower speeds to access larger markets (techUK 2016). Demand for the highest speeds and the largest data volumes is almost invariably driven by video consumption. A person can only watch one video stream at a time, so understanding the data rates associated with the highest quality video feed required is a good upper limit. This may increase in the future if higher resolution video grows (e.g., demand for 4K video) or if applications such as virtual reality demand more information. By way of example, 4K video (video with roughly 4,000 pixels of horizontal resolution) requires around 20 Mbps.° This is an upper limit, as most mobile screens are far too small to make watching video at this resolution worthwhile. MNOs have found that “throttling” video back to 1 Mbps or even less has no noticeable impact on mobile handset users. A somewhat different question is the speed needed for instantaneous web browsing. The issue here is less about absolute speed and more about “latency”—the time it takes for a request (e.g., for a new page) to be sent to a server and to receive a response (as shown in Figure 3.1). Beyond a certain speed, other factors—such as the turnaround time at the server and the delays inherent in the internet TCP/IP protocols— become constraining.® This data rate is currently around 4-8 Mbps (and hence most users will not notice an improved browsing experience once data rates rise above this point). Resolving this requires changes to internet protocols and architectures—something that has to occur on an internationalbasis within internet standards bodies and key industrial players. Page Load Time (seconds) 1 2 3 4 5 6 7 8 9 10 Data rate (Mbps) Source: Rosenthal 2014. Figure 3.1: Page Load Times There is also something of the-chicken-and-the-egg issue in that, if data rates reach a point where the costs of increasing them further are very high, then developers will be aware of this and will not tend to develop applications that exceed this data rate. Hence, the point where a major technical or economic step- change is needed to increase data rates can become “sufficient” in a self-fulfilling manner. Alongside mobile coverage provided via cellular, there is also mobile coverage provided via Wi-Fi. Indeed, estimates are that of all the data provided to mobile devices, about 50 percent to 80 percent’ is carried via Wi-Fi. Wi-Fi also typically provides the connectivity in the home from the broadband access point. Wi-Fi can, in the best-case scenario, deliver rates in excess of 50Mbps. However, these rates drop quickly if the Wi-Fi spectrum. is congested or if devices are not close to the access point. The sufficiency of the currently available speed was confirmed in a recent study by the BCG [3] (Sherman et al. 2015) which asked users about their mobile experience and correlated it with the network speed and latency. They found that once speeds exceeded 1.5Mbits/s there was no increase in consumer satisfaction when watching video, and that satisfaction when using apps stopped increasing at lower speeds, below 1Mbits/s. They concluded that “the telcos’ race for speed may, in fact, be a largely unnecessary endeavor that breaks the cardinal rule of focused investment: spend where the spending counts most.” They did notice that satisfaction increased as latency fell, with latency levels as low as 75ms appreciated for video and in the region of 25-50ms for some other apps (4G currently delivers around 30ms latency in most uncongested networks). They concluded that “cellular carriers should, therefore, consider intensifying their efforts to reduce network congestion.” As BCG noted, current 4G networks deliver speeds well in excess of 10 Mbps (when not congested). Indeed, some MNOs now market speeds of above 100 Mbps, and manufacturers have reported tests delivering over 1 Gbps when aggregating multiple 4G carriers. It is very hard, then, to understand why speeds faster than 4G might be needed. (The question of whether more capacity is needed in order to ensure that speeds do not slow as demand rises is considered next.)In passing, it is worth noting that there are parallels here with the fixed broadband world. The same restrictions apply on web browsing and broadly the same on video download. For home usage, the highest data rate service is likely to be 4K streaming video using around 20 Mbps. With multiple occupants in the home, requirements might peak at around 60- 80 Mbps. This is well within the capabilities of fiber-to-the- cabinet (FTTC) deployments which then use solutions such as very high bit rate digital subscriber line (VDSL) or G.fast to the building. The focus on delivering fiber to the home seems as equally unnecessary as the high speeds within 5G. Further, it might cannibalize investment that could otherwise occur in important areas such as enhancing coverage, as examined in later chapters. Indeed, in Australia where there has been government-sponsored deployment of fiber to the home (FTTH), the experience has been that (1) few subscribers opt for the higher data rates available via fiber, with most selecting rates of 25 Mbps or 50 Mbps that would have been available on FTTC, and (2) the additional time and manpower needed for FTTH deployment has meant that homes that would have already received an FTTC upgrade under an FTTC strategy are still awaiting any form of upgrade. Here, the net result for the consumer has been negative.® Latency As noted above, latency does have an impact on user experience. Latency is broadly a measure of how long it takesfor a request to make it from the mobile phone to the end point in the network. For applications like video streaming, latency is irrelevant, as the handset can buffer material in advance and so never needs to send an urgent request. But for applications like web browsing, once speed is above 1 Mbps, it is latency that determines the time it takes for a new page to load after the user clicks on a link. The importance of latency can be seen when web pages have numerous elements. It is quite common for a web page to have 100 or so parts—text, images, headers, advertisements, and so on. If the latency was 30 milliseconds (ms) and there were 100 elements all fetched sequentially, then the page load would take 3 seconds. In practice, some elements can be fetched in parallel; web pages optimized for mobile use have much fewer elements. Latency has fallen across the cellular generations. It was around 500 ms with 2G, perhaps 100 ms with 3G, and around 30-50 ms with 4G. As BCG noted, falling from 100 ms in 3G to 50 ms in 4G has improved user satisfaction. Further improvements may be both harder to deliver and have less impact. As an example, most applications where latency is seen as a critical issue involve video—such as VR or remote control applications. Even the most advanced VR headsets have a video refresh rate no greater than 100 hertz (Hz), which means it takes 10 ms for a new video frame to appear. The frame requires some processing before it can be displayed. Hence, even with zero latency from the rest of the system, around 15 ms latency is inevitable.The theoretical latency of 4G is 10 ms—additional delays tend to occur within the core network of the MNO. Once the message leaves the cellular network it may need to traverse continents. The latency imposed by a message sent from the East Coast of the United States that needs to reach a server on the West Coast is around 30 ms, and the time for it to get from Europe to the United States is around 60-100 ms. Some content can be cached on servers within the same country, but this typically only works for the most visited pages. So, a 4G message might incur a 10 ms delay across the radio interface, 30 ms across the MNO’s core network, and 50 ms across the internet. In this case, the radio delay is slightly over 10 percent of the total. If the radio delay were reduced by half to 5 ms, the total delay would fall from 90 ms to 85 ms, which would be barely noticeable to any users. Of course, core networks could be optimized to reduce the 30 ms delay, but this can be done with 4G networks perhaps more easily than a complex virtualized 5G network, where many of the resources in the core would not be under the control of the MNO. Currently, work is underway to reduce the theoretical 4G latency to 5 ms by halving the size of resource blocks. Within the 5G community, the original 1 ms latency target had been determined impractically difficult and modified to 8 ms, although these numbers may change as standards develop. Latency is important, but 5G seems unlikely to have a materially lower latency than 4G in practical situations. Even if5G did have a lower latency, the impact would be minimal, since latency in other parts of the networks would dominate. Predictions of Volume The volume of mobile data has been growing ever since the launch of the iPhone in April 2007. Figure 3.2 shows what happened to both voice and data volumes in the years immediately after the launch of the iPhone. 450 7 400 350 Voice Petabytes/month Data 21.02.03 G4 21 O2.03 24.21 G2. A3.04.Q1 22.0304 01 07 07 O7 O7 08 08 08 08 09 09 :09 09 10 10 10 10 11, Figure 3.2: Growth in Mobile Data After the iPhone Was Launched While voice grew steadily, data demand exploded, growing around a hundredfold in the five years from 2007 to 2011. It has continued to grow rapidly since then. Figure 3.3 shows the predictions for mobile data traffic made in Cisco’s industry renowned “virtual networking index” (VNI) in recent years.?