This article originally appeared in the Dec. 2012 issue of Next Gen Mobility Magazine.
The combination of smartphone penetration with advanced wireless networks and subscribers’ widespread use of bandwidth-hungry services such as video applications are already stressing service provider networks. And it’s about to get worse.
Mobile data is expected to increase significantly between 2011 and 2016. In fact, according to the Cisco (News - Alert) VNI Report 2012, “Mobile data traffic will grow at a compound annual growth rate of 78 percent from 2011 to 2016, reaching 10.8 exabytes per month by 2016.”
Dialogic (News - Alert) recently published an infographic that discusses the implications of this growth in more detail. Here’s an excerpt:
But building out new bandwidth to address the future needs just isn’t feasible. Service providers simply can’t spend whatever they need to keep pace because capex spending needs to track revenue.
A 2012 Ovum (News - Alert) Wireless Backhaul forecast report delivers a cautionary dose of reality with the numbers. According to this report, a capex constrained forecast where revenue and capex spending are in line predicts that capex spends on backhaul will realistically only grow to $9.175 billion by 2017, as opposed to the $21 billion figure suggested by a capacity-driven prediction.
Per the Ovum report, “Accommodating the projected mobile traffic demand with the capex -constrained level of equipment spending will be a challenge, and will spur adoption of cost-savings measures.”
There are a number of options for addressing difficulties stemming from the mismatch between the increasing bandwidth needs of subscribers and the bandwidth that service providers can afford to make available.
One option of course is pricing changes for subscribers. If the data levels available were capped based on the consumer price levels, then the service provider could control bandwidth usage through pricing. This is something within a service provider’s reach today, but being the first service provider in a competitive environment to change one’s tariff or fee structure is risky, since it could cause customer dissatisfaction and departure.
There are other, higher-cost alternatives to support bandwidth growth:
- deploying new capacity
- offloading to Wi-Fi networks
- deploying new technologies
- upgrading the network
These alternatives are already being used by service providers today, with an increased rollout of high-speed packet access (HSPA+) and LTE (News - Alert) being prime examples of new technology deployment.
However, these options are capex heavy and take time to deliver.
An option that generally does not require large capex or long ramp up time is for the network to “become smarter” and optimize the data that is going through it.
Ultimately, a combination of all the alternatives will be deployed. Optimization of video and data, however, stands to be an integral part of a multi-pronged approach for service providers to be able to deliver on the bandwidth demands of customers, while maintaining the quality of service and quality of experience that customers have come to expect.
Jim Machi is senior vice president of marketing at Dialogic, Inc.
Jim Machi is senior vice president of marketing at Dialogic Inc. (www.dialogic.com).
Edited by Braden Becker