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Mobile Broadband Operators Heading for Capacity Crisis

Posted: 26th Oct, 2009 By: MarkJ
mobile broadband logoThe latest research from Informa has revealed that mobile data / internet traffic, such as from users of Mobile Broadband services and Internet capable Smartphone's, will rise 25 fold by 2012; but over the same period operator revenue from related services will only double.

Dimitris Mavrakis, Mobile Network Analyst from Informa, told BBC News Online :

"Revenues from data are increasing much slower than traffic. Where operators are experiencing exploding data traffic, revenues are not following them."

It's easy to forget that consumer affordable Mobile Broadband packages came into existence, at least in part, because operators experienced less demand for 3G services (i.e. video calls) than expected, which left them with a lot of unused resources.

The situation is nothing new, with concerns being voiced about the problem for the past few years. The simple fact is that mobile data / capacity is still expensive, which means that operators gain very little revenue back in return for offering affordable consumer data services.

The future generation of mobile technology, such as Long Term Evolution ( LTE ), will be better at capacity management but can't solve the problem on its own. Operators will still struggle to afford extra capacity and LTE itself won't surface until late 2010 (see our 'Ericsson Next Gen UK-LTE Mobile-Broadband Interview' article).

Presently it is still unclear how this situation will play itself out, although we expect that the result will be an inability by operators to offer consumers the best speeds from new technology. Instead the average performance of Mobile Broadband services will increase only very slowly, if at all. At its worst the performance might even decline. That or prices will have to rise.
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