As technology advances, prices tend to drop. This was evident throughout the 1990s, when PC prices continually dropped, despite a boom in processor power. Yet with mobile technology we’ve not seen such a trend. Handsets remain as expensive as they were years ago. The cost of cellular service, too, has not fallen — at least not to a considerable degree.
Chances are, these prices will remain the same, or even increase, in the years to come. That’s because companies are seeing their own costs rise rather than fall. Specifically, their network costs continue to rise, which means they could hit us where it hurts the most: monthly rates.
There are a few reasons why cellular carriers are facing this situation currently. There appears to be no easy way out.
Increase network costs could result into higher monthly cell bills
Cellular carriers are getting hit from three directions. First, a greater number of people are buying smartphones. People are activating 850,000 Android handsets daily, and that number is increasing. Add to that a comparable number of iPhone activations, plus connections with devices from RIM, Windows Phone, and other platforms, and it becomes an enormous number. While not all of these activations are for new smartphone customers, if even 10 percent are, it’s still a huge daily increase in the number of connections.
Second, smartphones are capable of doing more than they were previously. As users download and use more apps, they’re going to use more data through those apps. Carriers have tried to curb this by introducing monthly data caps, but that only helps on a per-user basis. With more people using smartphones, they’re going to continue to get hit with more data usage.
Third, there are more devices that have cellular connections. Tablets are a big culprit, but there are also mobile broadband laptop cards, portable hotspots, and other devices that use a cellular network for data. More and more devices want to use this power, too, which means more connections.
It’s tough for any company to keep up with this increased capacity. That means carriers have to adapt.
Again, carriers face multiple problems when it comes to network technology. First, there is the constant need to upgrade. In the past few years we’ve seen carriers unveil their 4G plans. Upgrading network technologies like this is costly in itself. It usually requires large swaths of unused spectrum, which get flipped on with the new technology. Then, older network stations need upgrading in an efficient manner.
The other end is that carriers need to continually tweak their networks for greater efficiency. This is in response to the increasing number of connections. Carriers need to adapt when their networks experience greater usage levels, and that means making existing cell sites more efficient. While this cost gets built into our monthly cell bills, it’s not something that’s going away. Even after all carriers upgrade to 4G, they’ll still need to tweak their networks to maintain optimal usage.
Our mobile phones are, for the most part, safe. That is, viruses aren’t as widespread on smartphones as they are on PCs. There’s good reason for this, though. Mobile operators go to great lengths to keep their networks virus-free. It’s one thing to have a virus on a computer. But to have it on a mobile phone, where it can potentially affect the entire network, is a huge risk. And carriers know this.
To combat viruses and other malware, carriers have not only adopted typical anti-virus measures, but they also employ SCADA systems. SCADA — supervisory control and data acquisition — helps alert carriers to errors in the network. This allows them to identify and fix the errors in a timely fashion. This is a huge benefit to end users, but it cost the carriers a lot to maintain. Since they will never lack the need for SCADA and anti-virus protection, those costs will not drop.
The days of falling technology costs are coming to an end. We saw huge drops in prices in the last few decades, but that was mainly for local technology. When we add in networks and all the complications that come with them, it’s difficult to envision price drops. Maybe devices will cost less to assemble, but the network costs are not going away. In fact, with the increasing number of network connections, we could even see our cellular bills rise in the next few years. It’s sad, because we never want to pay more, but it’s simply the reality of the situation.
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