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Mobile broadband: boom to bust? Print E-mail
Tuesday, 24 June 2008
Be careful what you wish for is analyst message to network operators.

According to a new research report from the analyst firm Berg Insight, the number of notebook PCs with HSPA/LTE mobile broadband connectivity in Europe will grow from 8.4mn in 2007 at a compound annual growth rate (CAGR) of 34.1% to reach 49m in 2013. This development will be driven by consumer demand for ubiquitous Internet access, and rather than replacing fixed networks for Internet access, mobile broadband will first and foremost be a complementary access technology, providing a secondary Internet connection when outside of the home.

As embedded HSPA/LTE chipsets gradually become a standard feature in notebook PCs designed for the European market over the coming three-to-five years, end-users will simply need to insert a SIM-card into their computer to get online at virtually any location.

So easy street beckons for mobile network operators looking for ways to take up the slack caused by the falling voice ARPU and the on-going commoditization of voice and SMS? Not really. Berg Insight believes mobile operators will face a formidable challenge in managing the explosion in network utilisation. Mobile data traffic, primarily generated by USB-sticks and PC cards, already exceeds mobile voice traffic in terms of volumes on advanced markets. In Sweden for example, some half a million mobile broadband terminals are estimated to have generated twice as much network load as all 10 million handsets in the country combined. Consumers already account for 80% of the data volume in spite of only making up roughly 40% of the mobile broadband subscriber base.

“Every mobile broadband service provider has a dilemma,” suggests Tobias Ryberg, senior analyst, Berg Insight. “On the one hand they have a highly attractive proposition – a novel mobile service with high ARPU. On the other hand, the very popularity of the service stretches the mobile network infrastructure to its utmost limit – threatening to degrade the level of service for all subscribers.”

Berg points out that the main response by operators so far has been to impose some restrictions on data traffic. Plus actual data speeds are normally much lower than advertised due to lack of network capacity. Ryberg concludes that significant network investments are urgently needed if operators want to keep up with demand. “In a few years, Internet users will expect to be able to view full-HD streaming IPTV via their Internet connection. Then it will not do to offer 14.4Mbits/s, which is actually 1Mbits/s, or unlimited data traffic, which is in reality limited to a few gigabyte per month,” he warns.

Still, the mobile broadband beat goes on. In other news the GSMA pressure group and the NGMN Alliance, the organisation focused on the evolution to the next generation of mobile networks, have agreed to cooperate to help steer the development of mobile broadband communications. The two groups will work together to enable users of next generation mobile networks, such as those based on LTE, to roam on to existing GSM, WCDMA and HSPA networks, which now cover more than 80% of the world’s population. The GSMA and the NGMN Alliance also aim to develop the commercial frameworks and technical platforms necessary so that all mobile services will be able to travel across both next generation networks and existing networks based on the GSM family of technologies.

“This cooperation will certainly help to steer the future of mobile broadband and will support the rapid deployment of NGMN technologies,” believes NGMN Alliance operating officer Dr. Peter Meissner. “Our agreement is not just about liaison, it is project driven and we have clearly identified those areas where the mobile industry needs to cooperate.”

We wonder if looming network exhaustion is among those areas.
John Williamson
 
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