mobile networks breaking up?

To secure exclusive rights to the iPhone, [AT&T] acceded to Apple’s demand that the device come with a simple, flat-rate plan. But instead of selling only a few million as it expected, AT&T now has an estimated 12m-14m iPhones on its network. Its data traffic has grown by 5,000% in the past three years.

Small wonder that it has had a hard time coping, particularly in such technophile cities as New York and San Francisco.

wireless networks are different from fixed ones. In most cases, the extent to which one subscriber uses a fixed connection has little impact on other customers, since each has a separate link to the internet. But the data-transfer capacity within a cell is shared between several handsets. If left unchecked, a small group of users can gobble up most of the bandwidth, as on AT&T’s network, where the top 3% of users consume 40% of it.

operators will have to introduce more stringent usage caps, demand a premium for better service or charge by usage.

The Economist’s article.

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