Data deluge forcing carriers' hands

Keith Willetts, TM Forum
24 Mar 2010
00:00

Smart devices forcing operators to hasten 4G plans

As providers feel the heat from various smart devices and their networks buckle under the data pressure, they'll be forced to migrate to the next generation of wireless broadband networks. Whether it's under the moniker of Long-Term Evolution (LTE) or Wimax, 4G is being researched, planned, trialed and soon actually deployed in markets around the world.

But while providers will spend billions to add access point base stations and otherwise upgrade their network or create an entirely new infrastructure, this won't necessarily translate to a huge boost in revenue. Quite the contrary. Today's fickle consumer is demanding more for less, which makes things much more complicated for providers. In a chicken-and-egg scenario, they are forced to spend a hefty amount of capital to upgrade their networks but are not guaranteed that existing customers will stick around, or that new ones will flock to them.

Sleeping with the enemy

It's going to be an interesting rollercoaster ride, and one that will get even more interesting if some recent partnerships in the provider world are any indication. In the UK, O2 announced that it would move its network operations to BT's much-hyped 21st Century Network (21CN). This is a really significant move, because we're talking about both fixed and mobile traffic -- not just the backhaul.

Also in the UK, Vodafone and T-Mobile have agreed to network sharing, and in Australia, Vodafone and three other operators agreed to a similar mobile network-sharing deal. The bottom line is that providers are taking radical measures to cope with flat overall revenues coupled with the massive increase in bandwidth demand from customers.

Unfortunately, the cavalry isn't coming over the hill. The only certainty is cost-cutting, but this should have happened already rather than waiting and making changes and adjustments as a reaction to the bandwidth crunch.

For providers that waited, everything they have will have to go into the network unless they can outsource network operations and focus on running their business. It's a real gamble, and it's the choices mobile operators have made in the past year and will continue to make this year that will decide whether they make it out of 2010 in one piece.

Keith Willetts is co-founder and chairman of the TM Forum

This article originally appeared in SearchTelecom.com

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