Mobile Operators Face a Massive Increase in Network Cost due to Mobile Data Explosion: Strategies to get Cost Under Control.
MUNICH, May 15, 2012 /PRNewswire/ --
The tremendous growth in mobile data traffic - Solon Solon, Athenian statesman
Solon (sō`lən), c.639–c.559 B.C., Athenian statesman, lawgiver, and reformer. He was also a poet, and some of his patriotic verse in the Ionic dialect is extant. At some time (perhaps c.600 B.C. Management Consulting expects a more than 15-fold increase between 2011 and 2016 for Germany alone - will put strong pressure on operators. Mobile operators face significantly higher cost for providing additional network capacity. According to according to
1. As stated or indicated by; on the authority of: according to historians.
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3. the Solon white paper "Mobile Data Growth: How operators can handle the traffic explosion" which is being released today, the cost for access and backhaul network could almost double within five years. Solon recommends a set of measures that will enable operators to provide bandwidth in a more cost-efficient way.
"Mobile operators need to act now to meet the mobile cost challenge," warns Stephan Kalleder, Principal at Solon and author of the white paper. Without adequate countermeasures That form of military science that, by the employment of devices and/or techniques, has as its objective the impairment of the operational effectiveness of enemy activity. See also electronic warfare. , network expenditures will increase from 12 per cent of revenues in 2011 to 23 per cent of revenues in 2016 according to Solon estimates. "Since voice revenues are expected to grow moderately at best, the future profitability of mobile operators is strongly determined by how quickly they can improve the network cost base," says Kalleder.
Mobile operators can take two major approaches to significantly reduce the risk of cost outstripping data revenues: optimization of the existing infrastructure and network sharing. Network optimization concentrates on expanding network capacity through the migration to LTE (Long Term Evolution) See 3GPP. and on actively managing data traffic. If mobile operators accelerate the LTE deployment, they will benefit from additional spectrum allocation and higher spectral efficiency. In addition, Solon proposes to more actively manage data traffic through implementing different tariff and policy models or by offloading mobile traffic to fixed lines. Another focus is on optimizing video delivery since mobile video consumption is likely to drive around 70 percent of the anticipated traffic growth over the next five years.
Entering into network sharing agreements has proven to be a highly successful strategy especially for smaller to mid-size operators. "By sharing the same infrastructure - from base stations to backhaul, mobile operators can save up to 35 per cent of the cost of the shared site," says Kalleder.
If operators adopt the proposed infrastructure and network measures, Solon expects operator's EBITDA (Earnings Before Interest, Taxes, Depreciation and Amortization) A metric used to show a company's profitability, but not its cash flow. EBITDA became popular in the 1980s to show the potential profitability of leveraged buyouts, but has become margins to remain fairly stable. "At the same time, mobile operators need to develop new revenue and tariff models," adds Marc Sier, Managing Director at Solon Management Consulting. "Monetizing data is a big challenge but finding the right pricing models and opening up new revenues streams such as M2M M2M Machine-to-Machine (communication, mainly mobile)
M2M Minutes to Midnight (Linkin Park album)
M2M Mobile to Mobile (cellular phone)
M2M Month to Month or partnership models will enable operators to close the revenue gap and even increase profitability."
The Solon Telecoms white paper " Mobile Data Growth: How operators can handle the traffic explosion" is available for download. The first white paper of the mobile series is available under " Mobile Data Growth: How German mobile data traffic will grow by 2016".
For further information or to arrange an interview, please contact Margret Steinle at +49-89-2103880 or mas (at)solonstrategy.com.