Hutchison Whampoa

Technical limits behind unlimited data storm

PUBLISHED : Sunday, 26 February, 2012, 12:00am
UPDATED : Sunday, 26 February, 2012, 12:00am


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When the time came, the industry was split.

On February 13, when new rules on unlimited mobile phone data plans came into effect, telecommunications companies PCCW and China Mobile stopped offering unrestricted contracts to subscribers, while SmarTone, CSL and 3HK decided to plug on.

Under new rules from the telecoms watchdog Ofta, each operator had to decide whether to stop marketing 'unlimited' smartphone packages, or to keep going, but clearly set out hidden pitfalls in such deals in contracts and in promotional material.

Unlimited plans, which let subscribers download as much data as they want for a fee, have become more popular over the years as smartphones have become more common.

In Hong Kong, mobile data usage across all networks has shot up in the past year. According to Ofta, usage rose from 278MB per user per month in November 2010, to 370MB in June last year, and 451MB in November.

However, it is not known how many people have signed up for unlimited plans.

In any case, the plans had never really offered an endless stream of information. Speed-conscious subscribers had noticed slowdowns in data transmission after they used a certain amount of data. Many customers have also complained about poor service and network coverage.

Companies blame a minority of heavy users on unlimited data plans for overloading the networks, slowing down surfing speed for the rest of the consumers.

As a result, unlimited contracts are becoming rarer overseas. In the United States, major phone operators, including Verizon and T-Mobile, scrapped their unlimited data plans in 2010. And, some networks in Britain have also stopped offering them.

Analysts say the shift away from unrestricted use is inevitable as more consumers switch to smartphones, crowding networks with their data-intensive demands.

But, how hard would it be to support expansion of unlimited data use?

According to the experts, it's all down to the number of base stations and would be no more complicated than providing for more limited subscribers.

William Cheung Sing-wai, associate professor of electrical and electronic engineering at the University of Hong Kong, said it helped to view the mobile phone frequency spectrum like water flowing from a big tap.

'Each telecommunications company gets a fixed share of that flowing water, not more, not less,' Cheung said.

'When too many users ask for a constant stream of water from the fixed share, of course they aren't going to get much.'

But, in fact, the frequency spectrum can be used and reused even at the same time, if it can be channelled to more places.

The key, Cheung says, is to have more base stations around the city, allowing more users to have a share of the water without compromise.

Base stations are radio receivers, or transmitters, that serve as the hub of the local wireless network, and are owned by telecommunications companies. The more there are, the more data can be transmitted.

'Technically, the companies can still accommodate every user - even the heavy ones - and support those unlimited plans by simply having more base stations in busy places like Central and Causeway Bay,' Cheung said.

'This way, the water from the big tap can be split among different people even at the same time, with everyone getting a fair amount of it.'

But base stations are not cheap and because they must be installed in the middle of the city's busiest places, it can be costly to rent space to erect them.

There were about 25,000 base stations around Hong Kong at the end of last month, up from 21,500 in 2009, according to Ofta. Cheung says that the exact number each company has is kept secret because it is a clear signal of how good their network signal is.

And, this can vary widely. He recalls measuring signals from the five service providers in Hong Kong's country parks and hiking trails two years ago, and finding their coverage varied significantly, depending where he went along the public trails.

Still, there are other limits on growth. Cheung says each company is allocated a fixed share of the spectrum every few years and it is impossible for them to get more once the allocation has been decided. It is also impossible to expand the frequency spectrum itself because the range must comply with worldwide systems.

'It's impossible to just open a new frequency band, because the phones in this new band can't be used elsewhere in the world. So it's not as simple as that,' he said.

'Even if the government did [expand the frequency range], no one would use it because it's so incompatible.'

The authorities have done what they can for the system, making timely updates to spectrum allocations, enabling phone operators to keep up with the latest innovations in mobile technology.

But when it comes down to it, Cheung says, unlimited offers are a business, not a technical decision for service providers.

'Take a look at the telecoms companies' reports and you'll see they make lots of money. Our fixed phone or internet lines may cost us around HK$100 a month, but these mobile services are usually three times that,' he said.

'Their profit margins are much higher, given that Hong Kong is such a small place and maintenance costs are lower than elsewhere.

'Whether or not they continue providing unlimited data plans directly affects their companies' competitiveness, and has caused such a storm recently - it's not really a technical decision, but a business decision.'


megabytes of data the average person used in November 2011

- It was 278MB in November 2010