Mobile data explosion pitfalls for emerging markets operators

MELBOURNE, AUSTRALIA: Mobile operators in emerging markets face revenue losses and poor service quality if they do not plan adequately for the explosion in data traffic on the horizon, warns Ovum.

In a new report, the independent telecoms analyst states that operators need to prepare carefully if they are to deal effectively with the forthcoming data onslaught.

Shiv Putcha, Ovum analyst and author of the report, commented: “Mobile operators in emerging markets have begun the transition to 3G, LTE, and other advanced technologies, which will generate considerable levels of data traffic and place increasing pressure on their networks.

“Operators face the prospect of poor service quality and falling revenues if they don’t plan carefully for this upcoming surge in data traffic. While it is not quite a doomsday scenario, operators need to ensure that they have covered all areas if they are to cope with the coming explosion in traffic.”

The number of mobile broadband users in emerging markets is expected to increase exponentially over the next five years. Most consumers will access mobile broadband using ‘small-screen’ devices such as feature phones, and increasingly smartphones as penetration increases. Ovum predicts that small-screen devices will account for 77 per cent of all mobile broadband connections in emerging markets by 2015, equating to 1.6 billion connections.

This surge in mobile broadband connections has huge ramifications for operators’ networks, which will be flooded with millions of emerging market consumers using their mobile devices to gain access to the Internet for the first time.

The report advises operators to prepare by ensuring that their networks are relatively congestion free, and more importantly, that data traffic is correctly monetized. It also states that operators will need to invest in their RAN and backhaul networks to add capacity and remove bottlenecks.

Putcha concluded: “Operators will need to carefully consider the addition of optimisation and bandwidth-shaping tools that will ease the pressure of bandwidth-intensive applications such as video.

“Finally, operators must consider adding smart charging and policy-control capabilities that will allow them to balance network efficiencies with revenue generation and unique and personalised user experiences.”