According to the latest market study by ABI Research, beyond the typical bandwidth caps and network-based throttling efforts, a fundamental shift is about to begin in mobile data communications service delivery.
Mobile network operators around the globe have been ridiculed by their customers, due to perpetually poor service performance and declining user experience, as millions of new devices look to connect to the Internet.
It's true, many mobile operators have not scaled their broadband network capacity fast enough to meet the growing demand, and so they essentially crippled their service offering -- alienating their customers in the process.
A solution is close at hand, however, in the form of a smartphone-sized device that connects several Wi-Fi-enabled devices to a single mobile broadband subscription: the mobile hotspot router.
Shipments in 2011 are expected to reach 7.1 million units with an estimated end-user revenue value of $1 billion.
Instead of tackling mobile data service shortcomings by merely adding more core network capacity, network operators are increasingly looking for data signaling optimization and device aggregation techniques in the Radio Area Network (RAN), where mobile hotspot routers help alleviate these challenges.
"The first products to reach the market in 2009 generally overshot the mass consumer population," says Jeff Orr, group director, mobile devices at ABI.
Products were very complex to set up and catered to an IT-managed remote workgroup environment, such as a construction site or field emergency response team.
Advancements have been made by vendors to reduce the size and complexity of mobile hotspot routers. The solutions also address imminent carrier challenges as they expand operations to support the deluge of mobile data user demands.
Network operators want to grow the subscriber base profitably, but risk further alienating users who feel that the internet access continues to slow down as more devices are sold and activated. Clearly, punitive business practices that show contempt for customers are not a solution to the problem.
"The mobile hotpot router is the only standalone device capable of being distributed to the end customer that reduces the number of subscribers while growing ARPU," adds Orr.
The mobile routers also have the advantage of not consuming mobile data at the same rate as directly-connected devices -- meaning, users tend to interact with only one device at a time.
In 2016, rapid adoption of mobile hotspot routers will be rewarded with more than 60 million annual shipments and an approximate end-user revenue value exceeding $5 billion.