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Operators need not rush to deploy LTE

Operators needn't rush to rollout 3G LTE (long term evolution) networks in order to cope with surging mobile data usage, according to Arthur D. Little.

The consultancy explained to Total Telecom ahead of Tuesday's publication of the ninth annual Arthur D. Little-Exane BNP Paribas telecom report that players should focus for now on upgrading their HSPA networks to HSPA+; make use of mobile offload via either WiFi or femtocells; and manage demand for data services.

"Mobile data is going sky high – we forecast traffic to increase by [a factor of] 32 by 2015," said Didier Levy, director of Arthur D. Little's telecoms practice.

"But operators will be able to manage the data traffic explosion with current technologies like HSPA+; they don't need to start rolling out LTE services either this year or next year," he said.

Despite this the Global mobile Suppliers Association (GSA) said last week that 64 operators across 31 countries are now committed to deploying LTE networks, with 22 expected to go live by the end of 2010.

"There's no rush," insisted Levy.

As well as using HSPA+ to increase capacity and lower the cost of delivery per Megabyte, Levy noted several other ways that operators can cope with rising mobile data traffic.

"Mobile offloading onto fixed networks either using femtocells or WiFi represents a huge opportunity going forward," he said.

"Cisco has estimated that up to 30% of mobile data traffic could be offloaded... If mobile operators manage this, we believe it could improve their free cash flow by as much as 4%," he commented.

Operators can also manage demand more carefully by introducing tiered pricing for mobile data services complemented by fair usage policies, or charge a premium for guaranteed quality of service (QoS), suggested Levy.

App stores driving uptake, not revenues
Arthur D. Little's report also said that, despite the hype, app stores are not spurring a new wave of revenue growth for mobile operators.

"There is a lot of buzz thanks to [Apple's] App Store and the Android Market, plus initiatives from a number of operators including Orange and Vodafone," said Levy.

However, he pointed out that only 30% of the programs available from Apple's market-leading App Store are paid for.

"We expect the app store market in Europe to be worth €4 billion by 2012 – which is great – but it's still only 3% of total mobile revenues," he said.

Instead, Levy recommended that operators focus on providing access to applications and services.

"There is a larger revenue opportunity for mobile operators on the access side – selling data plans and providing the enabling platforms for other services like mobile payments or advertising," he said.

"Application stores are of strategic importance from a competitive point of view, but not for driving revenues."

Arthur D. Little-Exane BNP Paribas' report, Mobile Internet: Blessing or Curse? focused on mature European markets, conducting 87 interviews with 75 companies across 12 countries in the telecoms, media and technology sectors.

Источник: Total Telecom

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