Mobile traffic boom to revive struggling base station market by 2011, says new study
The widespread success of mobile broadband services - which now have more
than 100 million subscribers worldwide using more than 300 networks - is
sparking a data traffic boom that will revive the struggling mobile base
station market by 2011, according to Mobile Networks Forecasts: Future
Mobile Traffic, Base Stations & Revenues, a new strategic report from
Informa Telecoms & Media.
Global mobile data traffic is set to increase 1088% 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 Mobile Networks
Forecasts.
The report forecasts that global mobile traffic from YouTube and other
mobile video streaming applications will increase by 5514% 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 costs.
"We forecast that global mobile data revenues will only increase 77% from
2007 to 2012, compared to a 1088% increase in mobile data traffic over the
same period," says Mike Roberts, principal analyst at Informa Telecoms &
Media and author of Mobile Networks Forecasts. "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.
The mobile traffic boom will also lead operators to increase investment in
next-generation networks such as WiMAX and LTE, which can support higher
traffic loads at lower cost compared to traditional systems. As Roberts
notes, "This will lead both WiMAX and LTE base station unit sales to
overtake those of CDMA by 2012, as operators shift investment to
next-generation systems."
Mobile Networks Forecasts also predicts that 2011 will be the year when
global mobile data traffic overtakes mobile voice traffic, which has
always driven mobile network design, rollout and operation. "The mobile
industry is still largely structured around its key product to date,
narrowband voice, but that structure is breaking down fast due to the boom
in mobile data traffic," Roberts says. "The rapid transition from voice to
data traffic will lead to a fundamental overhaul of mobile networks, as
mobile operators and vendors shift their focus from voice to the mobile
broadband Internet. This in turn will help drive a wider overhaul of
mobile business models and strategy."
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