By 2012 a nine-fold increase in global mobile broadband revenues is expected.
Traffic levels, however, driven by peer-to-peer and video services, are expected to grow much faster to well over 20 times today’s volumes.
These numbers should be a wake-up call to mobile broadband providers. Clearly demand is there, but is there a sustainable business case?
Operators have entered the market very aggressively, offering inexpensive services, often priced well below those of fixed line broadband providers.
However, with mobile broadband requiring at least 20 times more bandwidth, carriers will be confronted with a very significant rise in the cost of connecting the mobile base stations to the core network.
At present these connectivity costs are already one of the largest cost items in the carrier financial sheet. If left unchecked they could seriously undermine the long term business case.
Long-term profitability will only be secured if operators acknowledge this challenge and embrace a firm and clear agenda to tackle the issues. First of all, with profitability under such threat, providers need to embrace an Average Revenue Per MegaByte (MB) paradigm, where the main focus lies on raising the profitability per delivered MB instead of the traditional ARPU (Average Revenue Per User) model only.
Minimising peak traffic will prove to be one of the most essential enablers for reducing additional capacity investments. This will require operators to evolve beyond today’s crude monthly quota limitations and introduce sophisticated policy management capabilities which control application access for each individual consumer, especially during highly contested periods or locations.
Optimising traffic flows from any device, ranging from basic phones to state-of-the-art laptops will be another key element to bring down the billions of dollars worth of additional backhaul investments mobile broadband providers will be forced to make.
In addition, mobile broadband providers need to build truly compelling and distinctive offers leveraging their unique mobile capabilities. Examples include home packages with dongles for all family members, a higher QoS (Quality of Service) when at home and a shared family bundle.
Other examples include roaming packages with included gaming, P2P, entertainment and business oriented packages. Such rich, distinctive service offerings will provide up- and cross-selling opportunities that will help operators to develop their offerings beyond a bland access model.
Put simply, operators will be able to charge a premium to users who download more media content. In return, they will need to invest in performance improvements with scalable real-time enforcement capabilities across all service offerings.
Only this way can operators offer high value, high quality and cost effective broadband at a reasonable price, with guaranteed levels of service.
Advertisement
