Mobile data demand will increase one hundred fold between now and 2020. Is this a boon to mobile telecom providers?
Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.
At first sight, the spectacular growth of mobile communication seems like a bonanza for mobile telecom providers. Mobile traffic is expected to increase 100-fold between now and 2020, from the current 1 exabyte to more than 127 exabytes [The Delta Perspective].
While we’re not yet there, but we’re nearing a future in which mobile connection will be ubiquitous, not only for smartphones and other devices we use, but for many other devices as well that simply ‘talk’ (that is, exchange information) with other devices (M2M, or machine to machine traffic).
We’re rapidly moving from an old world in which
telecom was based on one service per device (e.g. cellphone, laptop data card, TV) and services were based on what access network was required to deliver the service (e.g. DSL, 3G, PSTN voice). Additionally, services were classified as either business or consumer contracts and the rates varied. The future of telecom must look different. With the potential to connect over 50 billion devices by 2020, services will be multi-device and multi-network. [Forbes]
The rise of ever-faster mobile broadband will give rise to whole new services like mobile payments, smart (connected) meters and sensors, tele-healthcare, education, cloud services and much more which few of us can imagine, let alone predict, right now. One might keep in mind that with Moore’s Law continuing unabated, high-performance computing will be almost free by 2020.
According to Intel microprocessors will shift from 22nm to 5nm by the end of 2020. To grasp the consequences:
In very simple terms, if you shrink a computer chip from today’s 22nm tech down to 5nm, adding nor removing any transistors, you end up with something roughly six per cent the size of the original.
You should also realize that energy needs and cost will improve roughly along the same lines:
Thus, the individual chip cost is directly proportional to how many you can cram into a wafer. And if you’re cramming in 15 times more chips, well…