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Operators should embrace demand for wireless technology rather than fear it, states Analysys Mason report

Date: Fri, 08/27/2010 - 13:00 Source: Analysys Mason press department

Growth in data volumes, take-up of new data devices such as smartphones and netbooks, and increasing mobile usage are driving a substantial rise in wireless network traffic worldwide

Operators should embrace demand for wireless technology rather than fear it, states Analysys Mason report Terry Norman, report author and Principal Analyst at Analysys Mason

Mobile network operators should embrace these trends and look for the new revenue opportunities that they could deliver, which would compensate for the decline in profits from traditional telephony services, according to the latest research from Analysys Mason.
According to Terry Norman, report author and Principal Analyst at Analysys Mason, the message to operators is: “don’t panic”.
“Wireless network traffic is rising, but not at the phenomenal rates that some forecasters have claimed. Our prediction of ten- to twenty-fold growth in traffic volumes over the next five years (depending on the geographical region) is far more likely than claims of one-hundred-fold increases or more. Nevertheless, it is still a dramatic rise and will have a significant impact on operators’ strategies,” explains Norman in the report entitled Wireless network traffic 2010–2015: forecasts and analysis.
A combination of rapid growth in traffic volumes and demand for data, and of slow growth in revenue, is putting increasing pressure on operators’ profit margins, says Norman.
“There has never been a time when operators have needed to plan their network roll-outs more carefully. Investing in HSPA and LTE networks is important, but operators need to take into account the ongoing decline in revenue per megabyte. As our forecasts demonstrate, they will need to abandon flat-rate pricing models for data – and sooner than they might think,” explains Norman.

Other key findings of the report include:
• In developed markets, revenue per gigabyte will fall from USD23.21 in 2010 to USD4.27 in 2015. In emerging markets, revenue per gigabyte starts at the lower value of USD14.06 in 2010, falling to USD3.78 in 2015.
• M2M connections will account for only 11% of connections in developed markets in 2015, and the volume of traffic that they carry will be negligible. Nevertheless, M2M services will have a significant impact because they will be high-margin services, generating much higher revenue per megabyte than data to mobile broadband devices or smartphones.
• By 2015, 90% of wireless network traffic will be generated indoors in emerging and developed markets. MNOs need to provide good-quality indoor coverage with deep penetration in order to meet the demand for high-quality data services on smartphone and mobile broadband devices.

 

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