Technology | Media | Telecommunications

Monday, July 14, 2008

Mobile Data Won't Translate into Revenue

The adoption of mobile broadband services -- which now have more than 100 million subscribers worldwide -- is sparking a data traffic boom that will revive the struggling mobile base station market by 2011, according to the latest study by Informa Telecoms & Media.

Global mobile data traffic is set to increase 1088 percent from 162 petabytes (PB) in 2007 to 1,925PB in 2012, driven by a boom in advanced applications such as mobile Internet browsing and video, according to Informa.

Their report forecasts that global mobile traffic from YouTube and other mobile video streaming applications will increase by 5514 percent by 2012. Another key factor in the traffic boom is the rise of user-friendly devices such as the iPhone, which can lead to a thirty-fold increase in traffic per subscriber.

But operators will struggle to cope with the traffic boom because the popularity of flat-rate tariffs means that mobile data revenues will not keep pace with traffic -- which has a direct impact on service provider costs.

"We forecast that global mobile data revenues will only increase 77 percent from 2007 to 2012, compared to a 1088 percent increase in mobile data traffic over the same period," says Mike Roberts, principal analyst at Informa Telecoms & Media.

This will push current mobile network costs and architectures to the breaking point, and will lead to everything from network sharing and spectrum refarming to the launch of femtocells and next-generation networks.

The disconnect between soaring mobile data traffic and modestly increasing revenues helps to explain why operators will keep a lid on network investment in the short term.

"The mobile base station market will be flat for several years due to restrained operator investment in many regions and fierce price competition among vendors, but base station unit sales and revenues will rebound in 2011 as the mobile traffic boom forces operators to invest in new capacity," Roberts says.