Responding to the overwhelming demand for mobile data services can stress the financial resources of even cash-strong operators, but according to research firm Chetan Sharma Consulting, it doesn’t have to.
The study, conducted on behalf of Bridgewater Systems, tells mobile operators they can save approximately 60 percent of the delivery costs for mobile data over the next three years. And they can do so by addressing four key issues around network congestion management: policy management, data traffic offload, evolution to 3G and 4G networks and network optimization.
“A holistic approach to managing this traffic ... is critical or costs could exceed revenues and become unsustainable by 2012 or sooner,” said Chetan Sharma, president of Chetan Sharma Consulting.
The report highlights the impact of growing 3G penetration, lower cost smartphones and USB dongles, new tablets like the iPad and the popularity of mobile applications on the growth in mobile data traversing operators’ networks. It also provides insights into new service models underpinned by Bridgewater's deployment experiences with operators and customer case studies from Ovum and Morgan Stanley.
Sharma claims policy control could contribute annual cost savings of more than 10 percent, or $15 billion, in annual cost reduction by 2013 in the U.S. market. More savings are to be found in deploying a data offload strategy using WiFi networks or femtocells. It can save up to 25 percent, or up to $40 billion in that time and in that market.
David Sharpley, senior vice president of Bridgewater Systems, said we’ll be hearing a lot about Wi-Fi offload at Mobile World Congress next week.
“We are engaged with customers around the world doing exactly that,” Sharpley said. “If you get traffic off onto the Wi-Fi network it reduces the rate of congestion on the Radio Access Network but it also reduces the packet core congestion and that is a very expensive proposition when you are going through that core packet network and you’re just surfing the Internet.”
Evolving to HSPA and LTE could save up to $25 billion. And employing flexible, dynamic, and personalized pricing models that reflect subscribers’preferences and context, bandwidth and application usage, and network conditions will better align data revenues with network costs, the report said.
These new models might include tiered and usage-based models that take a smarter approach to service personalization and fair usage; application-specific charging that would generate appropriate revenues from high-bandwidth services; time-based models and mobile advertising; and mobile commerce funded approaches.
Steven Hartley, senior analyst at Ovum, said a holistic approach to managing mobile data growth is required to maintain profitability. “Operators must adopt a range of technical solutions to manage costs, from traffic management tools through to data offload and LTE or WiMAX. However, these will need to be allied with commercial approaches that protect revenues, such as tariff innovation and the enforcement of fair usage policies,” he said.
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