Getting it right on mobile broadband

Robert Clark
15 Oct 2009
00:00

Alcatel-Lucent chief Ben Verwaayen speaks the truth when he admits the telecom industry has "missed everything" in the digital boom.

"We missed email. We missed SMS. Some people have made a lot of money with ringtones...[we] think technology; we don't think end-users," he told an industry conference in September.

This is a guy who's worked both sides of the industry fence, previously holding BT's top post and before that was a senior exec at pre-merger Lucent.

Can the industry learn? I hope so, because the good times just don't last the way they used to.

It wasn't long ago we were celebrating the arrival of mobile broadband. Now a lot of people are fretting about the coming mobile data flood.

A US consultancy, Chetan Sharma, expects global mobile data traffic will pass 1 exabyte (EB) - a million terabytes - for the first time this year. In the next year both North America and Western Europe will top the 1 EB mark in mobile data traffic.

To put that into context, Cisco says that mobile data traffic will grow from a petabyte per month to an exabyte month in half the time it took fixed data traffic to do so. Cisco's Visual Network Index (VNI) predicts that mobile data volume will double every year between 2008 and 2013.

And here's an arresting stat: a single high-end phone like the iPhone or BlackBerry generates more data traffic than 30 basic or feature phones. A laptop aircard generates more data traffic than 450 basic-feature cell phones.

(For what it's worth, Cisco thinks most of the growth will come from video. In four years it will account for 64% of total mobile traffic.)

Huawei Technologies says that 3G dongles and smartphones have driven up mobile data usage by 10 to 15 times prior volume.
Mobile data is already a big chunk of revenue for many operators; in the case of NTT DoCoMo, the world's biggest mobile data carrier, 45%.

It's contributing to ARPU, but is it enough to halt its decline?

The problem is, as we all know, many operators have moved to flat-rate plans with large monthly allowances of data. Huawei puts it as only a vendor could: "If operators simply expand capacity to keep up with demand... including everything from streaming video to P2P downloads, they will never be able to achieve profitable operations."

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