Canada: Mobile Technologies Index Device Connectivity Speed: One Half Of An Equation

Last Updated: November 5 2012

Article by Chris Dulny, Evan Kelly, Darren Henderson, Richard Jhang, Tony Balasubramanian and Bali Minhas

From the user's perspective, the mobile experience starts with the speed at which the device receives data and applications. That speed is, of course, the combined result of the speed capability of the modem technology inside the device, which is fixed, and the speed capability of the infrastructure, which can vary.

Thus, wireless speed is a complicated component to measure. So complicated, in fact, that we break it into two components, each with its own metric, in the PwC Mobile Technologies Index:

  • Device connectivity speed in Megabits per second per dollar (Mbps/$)
  • Infrastructure speed in average Megabits per second (Mbps)

In this article we offer our forecast for device connectivity speed, explain the metric and how we calculate it, and explore some implications for mobile innovation. In the next article we post [see, "Coming soon" at], we will offer our forecast for infrastructure speed, and identify a pattern we see that involves both wireless speed components and that signals a future innovation inflection point.

PwC forecasts a compound annual growth rate (CAGR) of 37 per cent for average aggregated device connectivity speed as measured in Mbps/$ through 2015. [see Figure 1] Put another way, average aggregated device connectivity speed will be four times greater in 2015 than in 2011.

The device connectivity speed metric is actually an aggregation of metrics for all wireless generations in use, plus the improvements we anticipate for each generation during their period in use.

Device connectivity speed is defined as the theoretical maximum speed at which a mobile device can operate using a particular air interface technology, also known as a generation of radio transmission. The theoretical speed of each air interface is fixed, but the average speed realized within each generation of technology can improve through the optimisation of handsets, base stations and air interface protocols.

In addition to these variables, average aggregated speed in each generation will improve as OEMs shift production mix to faster protocols that exist within the generation. Shifts within generations will deliver the following improvements in Mbps/$ from 2011 to 2015:

  • 2G speeds will improve at 3 per cent CAGR as the mix moves from Global System for Mobile Communications to Edge.
  • 3G speeds will improve at 6 per cent CAGR as mix moves from evolution-data optimized and Wideband Code Division Multiple Access to High Speed Packet Access+.
  • 4G speeds will improve at 8 per cent CAGR as the mix moves from early Worldwide Interoperability for Microwave Access to mature Long term evolution.

These incremental gains may appear to be modest, but there is another dynamic at work: the mobile device production mix shifts as the industry moves from 2G to 3G to 4G. So we take the average speeds and weight them based on mobile handset production for each generation, and wind up with the Mbps/$ of "total devices produced" each year improving at a 55 per cent CAGR, 2011 through 2015.

However, this 55 per cent CAGR omits the cost of the main components in a handset that enable communication over the multiple air interfaces that end devices must support. After factoring in these costs, the actual Mbps/$ in the next four years will increase by 37 per cent—which is the device connectivity speed CAGR we use in our Index.

This is just half the rate of improvement we saw in the period 2007-2011, when the CAGR was a staggering 75 per cent. The slower increase in Mbps/$ is primarily due to the baseband chipset costs being significantly greater for the move from 3G to 4G than they were in earlier transitions.

Nonetheless, we anticipate that 37 per cent CAGR is enough improvement to enable continuing mobile innovation at a rapid pace. A review of recent history explains why we are confident in saying this.

When the original 2G iPhone was launched in 2007, Apple proved that consumers would accept iTunes on handsets and the Apps Store concept. However, 2G connectivity was slow enough to risk failure for the original iPhone if the faster 3G version had not been launched one year later.

By the time the 3G iPhone was introduced, the mobile handset supply chain was already producing more than 200 million 3G phones per year. Apple didn't have to create the 3G technology, it just had to put it to use. By the time Apple needed a faster connection to support its vision, the electronics industry was already devoting 20 per cent of production to 3G handsets. Consumers were buying the faster handsets before many applications existed that needed the speed, and in many cases before infrastructure speed had fully transitioned. In contrast to classic "pent-up demand," consumers were priming the pump for demand by pre-purchasing capabilities ahead of actual use cases, with the expectation that when 3G applications and 3G networks were available, their handsets were ready.

We anticipate this trend will continue, and we use this as an example of the following rule of thumb for timing the launch of a disruptive mobile venture:

When new capabilities reach a penetration level of 20 per cent, game-changing services can be launched, and market disruption can ensue. At the 20 per cent level, the market has begun transitioning from a relatively few early adopters to a mass market, and the entire ecosystem, including new entrepreneurs, are developing and positioning for game-changing solutions.

In 2007 and 2008, 20 to 25 per cent of device production was dedicated to 3G [see Figure 2]; this period coincided with the initial surge of 3G applications development. From the standpoint of infrastructure capital expenditure, 3G coverage had reached at least 53 per cent of what carriers were spending on 2G during that time. (We will say more about this in the upcoming infrastructure article.)

All the 3G-related factors—device production, applications development and infrastructure investment—set the stage for the success of Apple's iPhone, Google's Android, apps stores and other key mobile device phenomena that have contributed to the mobile ecosystem as we know it in 2012. 4G will offer even faster speed and less latency, which makes the speed more useful.

Together, improved device connectivity speed and improved infrastructure speed will deliver another wave of innovation and disruption (to be further explored in the next article). The move from 3G to 4G will enable new business models for carriers, and new use models for the mobile device, including more and better streaming video, mobile video conferencing, voice-over-Internet services and other applications involving the movement of large amounts of information, including the growing mass of data collected by the mobile device itself and transferred wirelessly to the cloud for analysis, and back again for action by the user.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on

Click to Login as an existing user or Register so you can print this article.

Similar Articles
Relevancy Powered by MondaqAI
In association with
Related Topics
Similar Articles
Relevancy Powered by MondaqAI
Related Articles
Related Video
Up-coming Events Search
Font Size:
Mondaq on Twitter
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
Email Address
Company Name
Confirm Password
Mondaq Topics -- Select your Interests
 Law Performance
 Law Practice
 Media & IT
 Real Estate
 Wealth Mgt
Asia Pacific
European Union
Latin America
Middle East
United States
Worldwide Updates
Registration (you must scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of

To Use you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these Terms or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.


The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use of the Content or performance of Mondaq’s Services.


Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions