Following our interview with Rupert Wood at the start of this week in which he stated that mobile data growth rates are being over-hyped, what have other industry watchers made of the topic?

The operators themselves
No, we haven’t surveyed the operators on this, but Amdocs helpfully had already commissioned Telesperience to carry out research into how operators themselves view the capacity crunch. Telesperience spoke to 30 network planners, and the research showed that 20% of those questioned (so around 6 operators of the 30 questioned) said they are experiencing “severe overload” at certain times, with a further 43% saying they experience “congestion” in certain areas. 37% said their network is performing OK as it is.

David Chambers, product marketing manager at Amdocs, said that the responses were a clear indication that the “hard facts” on the data capacity crunch were that it is affecting networks. Just over half report that increasing demand for data is related to service usage, with around 40% identifying “bandwidth hogs” as substantially contributing to its effects. In Europe, operators admitted that they were also seeing increased numbers of customer complaints as capacity demands grew – often fuelled, in the operators’ opinion, by flat rate tariffs.

Interestingly, these planners rated “extra capacity” as the best solution to the capacity crunch. Not data optimisation, not policy, not QoS-based tariffs and customer experience tools. Of course, ask a network planner what the best solution is, and he’d likely to reach for the “more network” button. Although there was some regional variation here – European operators were more likely to rate pricing as an effective tool, and least likely to rate data optimisation as a strategy. The Americans liked data offload the best. Overall, though, “expanding capacity” was the most popular option.

But there was another area of concern, too, and that was the backhaul, with 97% of operators saying they will implement Ethernet in the backhaul network in the next 2 years, with 17% of operators already having rolled it out, and 33% in the process of doing so. This deployment of Ethernet, to meet increased bandwidth demands, is bringing with it issues in implementing end to end QoS design, and capacity planning alignment between the cellsite and the transmission network.

Lance Hiley, VP Market Strategy, Cambridge Broadband Networks
“I have no reason to doubt the core data quoted that Analysys Mason gathered for their latest mobile data traffic growth forecast, and it’s helpful that somebody is finally challenging the hysterical forecasts we’ve seen previously, but the Analysys Mason report may be ‘missing a trick’. What it doesn’t seem to take account of is the fact that mobile data use is fundamentally a factor of availability and pricing – if there is plenty of capacity available, and access to that capacity is affordable, you can bet consumers and businesses will use it. The evidence of that is seen in fixed line data access where we see ever increasing capacity, at affordable rates, and correspondingly, ever increasing use.

So let’s look at the reality of mobile data use over the last year. We’ve had a boom in smartphone sales on top of a base of dongle equipped laptops and the launch of 3G equipped tablets. A much wider base of data equipped devices have the potential to consume much more data. At the same time, mobile network operators have actually done little in the way of major network upgrades and the result is that all of those devices are trying to use the same ‘pipe’ they were 12 months ago. The pipe has finite capacity and because of the way radio access networks are configured, they will allocate as much capacity as is available to the devices requesting it – ten simultaneous handset users on a single cell site may use the same capacity as 100 simultaneous users. The service for the 100 will be degraded relative to the ten because it’s physically impossible to squeeze more through the fixed capacity pipe.

That situation has led to an artificial restriction in mobile data growth and the increasingly restrictive data pricing policies of the mobile operators. Whereas I once had an unlimited data plan and 1Mbps+ access, I’m now restricted to 1GB and access more usually measured in Kbps. No surprise then that Analysys Mason report much slower growth than had been predicted by others (even if it’s at least partially contradicted by Vodafone which reported 88% year on year growth in the first quarter of its 2010-2011 reporting period).

The big question for operators, given the established appetite for data consumption in the fixed line world, is not “will data growth be X, or X times 100” but “how much capacity are we prepared to deliver”. If you take that view, your concentration has to be on finding the most efficient way of operating the network, not simply the radio access network, but the crucial backhaul element.”

Noam Green, Associate Vice President of Corporate Marketing at Mobixell
“The data growth numbers exposed in the recent Analysys Mason report are intriguing, and our installations around Europe have indeed indicated a slowdown in the exponential growth shown in previous years. But, contrary to the report, our numbers collected from the field show significant growth of about 60 per cent since April this year (six months) in a Tier 1 Southern European mobile operator. Other Western European Tier 1 operators have shown lower yearly growth rates of about 40-50 per cent.
Mobixell’s collected data continues to support indications that mobile video is continuing to lead the highest growth in internet traffic, and operators will still need to look at innovative solutions to save costs. As mobile video continues to improve in quality, most recently with HD quality video, the size of video files also increases, emphasising that effective mobile video optimisation is the way to provide for future mobile users, whatever the network data capacity.”

Stefan Zehle, CEO of Coleago Consulting
“A quick sweep of quarterly earnings release presentations from operators around the globe confirms that mobile networks are struggling to keep up with the growth in mobile broadband traffic. The story is the same in highly developed markets such as Finland or Austria and in emerging markets e.g. the Philippines or Chile.
While the introduction of tiered data bundles and curtailment of unlimited offers may have lead to lower data traffic from marginal mobile PC customers, the data traffic from handsets is growing well beyond the standard assumption of 10% of mobile PC traffic Coleago analysed traffic data published by the Finish telecoms regulator which shows that between the January 2008 to June 2009 mobile broadband traffic grew by a factor of 7.5 whereas mobile PC penetration grew “only” by a factor of 3.
Furthermore, the reported traffic numbers relate to the whole network, but mobile broadband traffic growth is not evenly geographically distributed. What really matters are the 15% to 20% of cells that are congested. Here operators are experiencing capacity constraints which impact on the user experience.
In the UK, where LTE will not be available for some time, mobile operators such as Vodafone, have embarked on an offload strategy adding WiFi access via BT’s network into the mobile broadband bundles. Why would they pay BT for capacity if this was not needed? Network planners are not silly. In Austria, Germany, Sweden and many other markets operators are rolling out LTE only after careful assessment of the business case. Management is very concerned with cash flow and certainly would not sanction LTE capex if this was not necessary.
One further issue is that the mobile broadband traffic growth curve is very steep, thus making it difficult to calibrate the optimum build ahead. If a network does not deliver a reasonable customer experience customers will churn. Some of the most demanding smartphone customers are also high voice spenders and of course operators need to retain these high ARPU customers.”