Data Bundles - What am I buying?

Have you ever sat down while high and asked yourself, where does this mobile operators get the data that they selling us? Neither do I.

What are mobile operators? In South Africa we have Telkom, Vodacom, MTN, Cell-C, and others. 

"So when I buy data bundles what am I buying from the mobile operators?" one might ask.

I don't have an answer to the question per se. The best I can tell you is that we are paying for a share of a larger fixed-sized bandwidth pipe to other networks.

What's a bandwidth?

It's the volume of information per unit of time that a transmission medium (like an internet connection) can handle. My WiFi router can handle 1.2mb/s, and the fastest recorded internet connection speed was in 2014 with a speed up to 1.4 terabyte per second. That's plus 116 000 times faster than my connection speed. So for those with such connections out there, my apologies if this post reaches you late.

The conclusion...is:

What we call data is a transit or our share towards the cost of carrying large volumes of data from say a server to your device where the data gets turned into information that we requested from the app or the website or whatever your reason is to be online.

Let's talk money!

How are the mobile operators making money out of all this?

Two ways, one is when we forfeit our data and the other way is by oversubscription.

1. Forfeiting Data - Let's say you have a contract for 10gig anytime data and 10gig night shift data bundles, but you can't stay until midnight to use the night shift bundles. After 30/31 days depending on the month you will be forfeiting the data. So you are paying for something that you don't use and that's someone's profit.

2. Oversubscription - If the fixed-sized bandwidth pipe costs R100 million per month for the mobile operator which has 1 million subscribers, and each of 1 million of those customers pay R200 per month, then the operator effectively brings in R200million - this covers the cost of the pipe and other things (salaries, marketing, promotion, amortisation of network equipment then profit for shareholders etc).

If you didn't know, I bet you will think differently when buying data bundles.

Share your thoughts below on the comments section below...

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