Download How Much is a Byte? - A Survey of Costs for Mobile Data Transmission

How Much is a Byte? - A Survey of Costs for Mobile Data
Transmission
Thomas Mundt
University of Rostock
D 18059 Rostock, Germany
[email protected]
Abstract
UMTS telecom providers promise the availability of broadband multi media information everywhere
within the covered area of their networks. This papers surveys what the actual costs for data transmissions over UMTS (3rd generation) and other wireless technologies, such as GSM (2nd generation)
GPRS, HSCSD, and EDGE (transitional generation) are, and compares those results with traditional
data transmission via ISDN, LAN, and newer technologies such as WLAN and Bluetooth. To reach
this, the paper tries to combine as many sources as possible. But, we do not look at the case from the
economic point of view. We analyze the technical conditions.
1 Introduction
Telecom providers promise almost unlimited possibilities for emerging wireless technologies - video on
demand and broadband online access to name the most often heart examples. But is someone really
willing to spend 200 EUR / USD to download the content of a CD? And what are the actual costs of
downloading a CD with UMTS? In this paper we use the following scenarios to compare the costs of
data transmission:
- Download of an E-Mail message (10 KB)
- Download of a word processor file with 10 pages (200 KB)
- Download of an MP3 encoded music file (4 MB)
- Live transmission of a 10 min long news presentation in low quality (360 x 288 pixels, 384 Kbps, 28
MB)
- Downloading the content of a CD (640 MB)
As technologies to be compared we have chosen:
UMTS (3G, [1]), EDGE (2.5G), GPRS (2.5G), HSCSD (2.5G), GSM (2G), and WLAN (IEEE 801.11b)
In order to estimate the costs there are various sources with different quality to gather information from.
Direct questions to telecom providers wont usually be answered and insider information are not for
public review. We do not believe that most telecom providers even know the exact figures. Actual
market prices are a first useful indicator. But prices may become lower during the time. The comparison
of costs for the deployment of the network infrastructure might give some hints together with the average
network utilization ratio. In some countries the licenses for UMTS frequencies will expire in 15 to 20
years time, reducing the time to gain a revenue. And finally, most telecom company’s business results
are available for public review.
For the purpose of this survey it is not necessary to know whether the download of a CD costs 1000 or
1500 EUR, both figures would be dissatisfying.
This paper does neither research social implications such as how much a mobile worker is willing to pay
for data transmissions, nor what further possibilities, such as shared networks, to reduce the costs are. It
does not reflect value adding services - plain data transmissions available to the end user at ISO layer 2
are considered. Quality of service aspects are not analyzed in full depth here.
2 Resource Management
Most of the technologies considered in this paper use the air as physical layer. Due to national in
international regulations the available spectrum is very limited, naturally much more limited than it is
for cable based solutions. The utilization of the available spectrum is very critical for the costs of data
transmissions. Two aspects are relevant for a cell based wireless network:
• The avoidance of interference between neighbored cells.
• The sharing of the available spectrum, respectively bandwidth, between users in a certain cell.
The first problem can be solved by strategies, such as a frequency apportioned spectrum. This is cost
relevant because only a part of the spectrum is available at a certain point. Network planning and
deployment has to be done very carefully. For WDMA used within UMTS network planning tools are
not even fully tested. Due to geographical (and geometrical) reasons even the best planning tool does
not lead to a perfect network.
Users of wireless networks are not equally distributed over the area. There are areas with higher traffic
and those with less traffic, but mobile users demand the availability of the network itself and the availability of free capacities (channels) anywhere anytime. They usually except a blocking rate of less than
5 percent and a non available network in less than 10 percent of all attempted calls. This limits the
network utilization further.
2.1
Usage of the Available Frequency Spectrum
GSM uses frequency to divide cells (FDMA). Within the cell the users gets time slots of the channel
of that cell (TDMA). Usually there are 7 time slots with 9600 bps (bits per second) (or 14400 bps with
less efficient error correction) either way available in a cell, in highly populated areas there can be more
than one frequency allocated to the cell. In average there are two frequencies in each cell allowing 15
parallel connections. Cells can have sectors or can have an omnidirectional antenna. In Germany the
Vodafone network for instance consists of approx. 16000 base stations with about 39000 cells [5]. (An
ideal circular GSM 900 cell - max. 35 km radius due to timing restrictions - could cover around 3800
km2 , which would allow to notionally cover Germany (357022 km 2 ) with less than 100 cells.) Vodafone
is one of the four GSM providers in Germany with approx. 20 percent market share and has a license
for 59 out of 124 channels at GSM 900 and 26 out of 374 channels at GSM 1800. When calculating
the overall network capacity the result is surprisingly low, less than 4 Gbps of download capacity are
available for the entire area of Germany (approx. 82 million people) when all available channels are
used for continuous data transmissions. Due to the demanded blocking rate and the known average
duration of a data and a voice call the real figure is much less than that. [7] gives further details about
the spectrum efficiency of different wireless technologies. For comparison, the most important internet
peering point in Germany (DE-CIX) which peers about 50 percent of the IP traffic between German
ISPs has an average load of about 16 Gbps, only across networks - not counting the traffic inside the
connected networks. The data rate of plain GSM makes it not suitable for realtime multimedia data
transfers, except fairly compressed speech. The transmission of a CD would last at least 6.5 days (about
an hour for a 4 MB MP3). Except from bad coverage and resulting data losses, GSM guarantees 9600
bps.
WLAN (IEEE 801.11b) does not guarantee a certain bandwidth to and from a single node. Under ideal
circumstances it allows up to 11 Mbps per cell. Further information about bandwidth in WLAN can be
found at [6]. The range of WLAN access points is limited to less than 100 m due to the low power output,
which would cover 0.01 km2 . To cover the entire area of Germany (including forests and unpopulated
areas) it would take more than 35 million access points with an overall throughput of 375 Tera bit per
second. To cover the entire populated area of Germany allowing people to access the network at home
there are roughly estimated 5 million access points necessary.
2.2
Approaches for Better Distribution of Bandwidth to Users
HSCSD (High Speed Circuit Switched Data) distributes the available bandwidth better among the users
within a single cell. It assigns more free time slots, respectively bandwidth, to users in a cell. Because
it is still circuit switched, it does not provide a better throughput for all users with a changing demand
of download and upload capacity - such as a surfing user. It only give fewer users a better data rate.
To maintain the required blocking rates, HSCSD will limit the number of time slots automatically when
other call attempts arrive. The available bandwidth within the entire network remains the same.
GPRS (General Packet Radio Service) does also not increase the overall bandwidth in the network. But
for a group of users within with alternating demand of bandwidth within a cell it provides better performance. The physical layer is only used when data transmissions are pending. For network providers
GPRS means a better load of the network. For users with a constant demand of download capacity above
9600 bps GPRS is usually not the preferable way to transmit those data [2].
EDGE (Enhanced Data Rates for GSM (or Global) Evolution) uses newer modulation technologies (8PSK instead of GMSK used for GSM) and further mechanisms to gain data rates up to 384 kbps on the
same 200 kHz bearer and frequencies such as GSM. Each TDM channel consequently has a bandwidth
of 48 kbps instead of 9600 bps. EDGE and GSM can coexist within the same frequency at the same
base station - meaning that EDGE or GSM can be changed from time slot to time slot. To install EDGE
network providers have to change major parts of the base station equipment and the backbone to transport
the higher amount of data.
UMTS uses a different approach to distribute bandwidth between users. When a cell has to provide
higher bandwidth the interference must be lower which can only be achieved by higher power levels.
Because the maximum power of a cell is limited, only mobile stations near to the base station can use
the full bandwidth. With W-CDMA or UTRA FDD the cells are breathing. This makes it harder to plan
the network and to compare an UMTS network with one based on GSM. An in depth description can
be found at [3]. The realistic overall capacity of a cell (not a single user as wholeheartedly promised
some years ago) is near 2 Mbps. A typical bandwidth per user would be 150 kbps. To use UTRA FDD
a cell radius of 250 m is a typical upper limit. UMTS offers several bit rates and access modes for users.
A disadvantage is that only certain multiples of the base data rate of 15 kbps can be used according to
the relevant spreading factors. A customer wishing to arbit a 250 kbps channel has to request a 480
kbps DPDCH (Dedicated Physical Data Channel). In Germany six UMTS licenses have been auctioned.
Currently (August 2003) there are four active licensees remaining - two have given up the venture. Every
licensee has auctioned a paired spectrum of 10 MHz (5 MHz in each direction) [4]. For UTRA FDD at
least twice as much base stations as for GSM are necessary according to [9]. For Germany this leads
to an estimated number of ca. 30000 base stations per network provider when the entire area should
be covered with high bandwidths at least in urban areas. The density of those base stations should be
chosen according to the expected user density. Hence, the calculated download capacity within the entire
network is about 60 Gbps - assuming that all cells are permanently used with continuous data downloads.
This is 20 times as much as with GSM with only twice as much base stations. The following chapters
will further estimate what the real factor will be.
3 Cost Estimation
Several cost factors are relevant for this estimation [10]. The price per base station equipment is almost
equal between GSM and UMTS. GSM licenses have been granted in a beauty contest in most countries
while UMTS licenses have been auctioned in most cases. We cannot say what the costs for marketing
campaigns will be, so we limit our estimation to ”engineering” and license costs. It might be harder to
convince customers to change from an existing and conveniently working technology such as GSM to a
UMTS than it was to convince customers to make the step to get a mobile phone at all.
For Great Britain JP Morgan and Arthur Anderson have estimated the costs for a single UMTS network
over 10 years [8]. The auctioned license will contribute about 25 percent of the costs. Cost of operation will be 24 percent, network deployment 12 percent, customer acquisition 11 percent, subsidies for
phones 11 percent, marketing 8 percent, acquisition of content 7 percent, and product development 2
percent.
These figures are comparable for those about Germany because the license costs per subscriber are in
the same range (UK 1589, Germany 2164, but remember, two of the six German licensees are out of
business, reducing the possible number of subscribers per remaining licensee) [10].
3.1
Cost Factors
In most countries the spectrum for UMTS has been licensed by the national government. In Germany
for instance the government auctioned six licenses for UMTS for over 50 billion EUR (8.5 billion EUR
each).
Network building costs (finding locations, setting up antennas, installing the background infrastructure)
and the rental of locations (ground, chimneys, roof tops etc.) should be almost the same for GSM and
UMTS. WLAN access points are much cheaper per box but to reach the same area coverage there are
investments of of 3.5 billion EUR necessary - not including the backbone structures and the installation
and maintenance costs - only for the 35 million access points as calculated in the chapter above. Network
management and maintenance costs should be in the same range for UMTS and GSM. Only those
maintenance efforts that depend on the number of base stations could be slightly higher for UMTS there are twice as much base stations leading to statistically the double number of failures assuming that
the MTBF is the same for UMTS and GSM equipment.
3.2
Facts from Business Reports
Although they try to give as little information as possible most telecom providers are incorporated companies and have to provide many details about their investments. Vodafone, for instance, has spent 5
billion EUR for its almost 16000 GSM base stations including the backbone and switching centers and
has planned to spent about 9 billion EUR for its UMTS network. These information have to be used
with caution but give certain hints for the cost estimation.
According to JP Morgan [8] the break even will be as far away as 15 years. This allows at least two
conclusions. First, the calculation is very tight and second, the duration of the license allows only 5
additional years to gain a profit.
3.3
Current Market Prices
Most costs, such as finding locations and installing antennas, are independent from the bandwidth provided by a single location. Technologies that dynamically assign bandwidth to a user or a locations
benefit from this fact. Plain GSM has very limited possibilities to change the bandwidth per user because it uses single channels, GPRS allocates the network per packet, EDGE improves the bandwidth
by a factor of 5 and UMTS dynamically allocates bandwidth. This should result in lower costs for each
generation of mobile networks.
Typical prices for in Europe are (EDGE is missing because it is not widely used in Europe) for GSM 40
Cent (EURO Cent) per minute (average between peak and off peak and without monthly fees). This leads
to a price of about 5 EUR per MByte for the customer. The total costs for the provider are at least 70
percent of that. Special cost plans for data reduce the prices to about 10 Cent per minute. The Megabyte
data costs about 1.50 EUR at these rates. Some providers allow HSCSD with up to 56 kbps under ideal
circumstances at no extra costs which further reduces the price per Megabyte to about 25 cent. But this
would reduce the available bandwidth to other customers. For the network provider HSCSD is only a
good deal when the free resources would otherwise not be used at all.
For GPRS there are a lot of tariff options with included data volumes making them hard to compare.
Low prices are 0,0010 EUR per Kilobyte data at up to 53 kbps. The Megabyte would consequently cost
about 1 EUR. GPRS and HSCSD are in the same category. What is cheaper depends on the concrete
case.
Current prices UMTS are not widely available. Only in Austria there are more than provider available.
Packet Switched Data costs 1.50 EUR per Megabyte. For Germany only two of the four remaining
licensees have published prices. They are in the same range as GPRS and vary between 0.16 EUR per
Megabyte and and 1.57 EUR per Megabyte. Most plans include a free volume with the monthly fee.
Surprisingly this is near the one tenth we assumed as costs from the number of base stations and the
infra structure. For calculation we will take 0.50 EUR per Megabyte as a good approximation.
4 Conclusion
We have used many available sources to estimate the true costs of mobile data transfers. For the scenarios
mentioned in the introduction this results in the following costs:
Scenario
Costs
GSM
Download of an E-Mail message (10 KB)
Download of a word processor file with 10 pages (200
KB)
Download of an MP3 encoded music file (4 MB)
Live transmission of a 10 min long news presentation
in low quality (360 x 288 pixels, 384 kbps, 28 MB)
Downloading the content of a CD (640 MB)
0.05 EUR
1.00 EUR
GPRS
/ UMTS
HSCSD
0.01 EUR
0.005 EUR
0.20 EUR
0.10 EUR
20 EUR
impossible
4.00 EUR
impossible
2 EUR
14 EUR
3200 EUR
960 EUR
320 EUR
From the technical point of view UMTS could be ten times cheaper than GSM. The currently available
consumer prices corroborate this theory. But the enormous license costs do not allow telecom providers
to further decrease the prices. Whilst UMTS is another step forward it will still be too expensive for
most of the usage scenarios which have been promised by the telecom providers.
References
[1] The UMTS Forum, 2000. http://www.umts-forum.org/.
[2] K. Basu. Wireless Multimedia: Panacea or Reality. In Proc. of International Mobility and Wireless Access
Workshop (MobiWac’02), Fort Worth, Texas, October 2002.
[3] J. M. Bauer, R. Westerveld, and C. Maitland. Advanced Wireless Communications Infrastructure. In Proc.
of 12th ITS-Europe Regional Conference, September 2001.
[4] Die Regulierungsbehoerde fuer Telekommunikation und Post. Musterlizenz (UMTS/IMT-2000-Lizenz).
http://www.regtp.de/, 1999.
[5] Vodafone Germany. The AskD2 Homepage. http://www.vodafone.de/askd2/D2-Netz/d2-netz.html, 2003.
[6] IEEE 802.11 Working Group. IEEE 802.11 Standard Wireless LAN.
http://standards.ieee.org/getieee802/802.11.html, 1999.
[7] F. Jaeckel. Wireless Technologies for the Access Network and Internet Access. IQ Wireless Report, 1(12):7
– 9, December 2000.
[8] J.P. Morgan and Arthur Anderson. Mobile Future. http://www.jpmorgan.com/, 2003.
[9] J. Schiller. Mobilkommunikation. Pearson Studium. Addision-Wesley, 2003.
[10] Y. Yang. UMTS Investment Study. Technical Report T-109.551, Helsinki University, Telecommunication
Business II, March 2003.