Two publications this month by Analysys Mason address the need for launching LTE mobile networks in two different contexts. One is an independent report on Mobile Broadband commissioned by the GSM Association, which found that spectrum allocation and the levying of additional taxes on mobile services are the major barriers to wider Mobile Broadband deployment and the launch of Long-Term Evolution (LTE), the next generation broadband technology in South Africa.<\/p>\n
The second is Analysys Mason’s own Viewpoint “The mobile data explosion: myths and reality<\/a>”, which examines and seeks to puncture six so-called common myths.<\/p>\n These myths are said to be:<\/p>\n 1. Mobile data traffic will grow at rates of above 100% per year for at least the next three years.<\/p>\n 2. Smartphones are spearheading the explosive growth in mobile data.<\/p>\n 3. Operators need to introduce indoor solutions to manage the explosion. <\/p>\n 4. Operators need to introduce tiered tariff plans for smartphones in order to control explosive growth.<\/p>\n 5. The value of transporting a byte is collapsing.<\/p>\n 6. LTE will change the picture.<\/p>\n The findings of these two publications appear to be inconsistent in some key respects, notably with regard to the urgency of the need for deployments of LTE. As a GSMA spokesperson said at AfricaCom in Cape Town, referring to the findings of the first AM publication, “It is imperative that ICASA provides clarity over future spectrum release plans and offers assurances that spectrum awards will follow international best practice.<\/p>\n Harmonised spectrum allocations must be made to bring South Africa in line with the rest of the world, and to maintain the momentum of HSPA and hasten the arrival of LTE. In contrast the Viewpoint concludes that the major risk associated with LTE is premature investment that will lead to excess capacity, not congestion because there will be insufficient or delayed investment in LTE.<\/p>\n To some extent these inconsistencies can be explained by geography. The Viewpoint is essentially Euro-centric. Its conclusion regarding LTE is based upon the observation that the majority of mobile data usage there takes place indoors and can (and is being) met by connections to fixed broadband access networks that do not involve the RAN (radio access network), so that in practice or so it is claimed deployments of HSPA\/HSPA+ in existing spectrum are adequate to meet anticipated demand. However in South Africa and many other countries fixed broadband access is underdeveloped and not widely available, so the majority of broadband traffic is going to have to be carried over RANs.<\/p>\n Nevertheless even if the growth of mobile data is substantially discounted from the forecasts of sources such as Cisco (up to 100% per year) there is significant evidence that the growth of video-intensive broadband applications for mobile and portable devices, even in rich economies where much of it can be directed over fixed broadband networks, will generate traffic volumes over RANs that grow more rapidly than the 10-12 times which is the maximum increase in their capacity which can be achieved with the deployment of new wireless technologies and the exploitation of additional spectrum.<\/p>\n In countries such as South Africa the majority of this traffic involving mobile and portable devices will have to be carried over RANs, so that even if the total volume is lower on a per capita and per km2 basis than in Europe the risk of RANs becoming congested will be significant, as the GSMA-commissioned report implies. The risk of congestion is exacerbated in all cases by the intrinsically shared nature of RANs, and the Mobile operators, many of whom also operate fixed networks (a situation that is ignored in the Viewpoint, which advises mobile operators not to pay attention to providing indoor solutions) will have to consider maximizing offloading of traffic from mobile devices onto fixed broadband assets whenever and wherever possible to minimize the risk of congestion, which occurs as a localized phenomenon by place (i.e. dense urban areas) and in time.<\/p>\n Since the Viewpoint does not anticipate a significant risk of RAN congestion it is also very complacent in dismissing the value of introducing new more differentiated and flexible pricing schemes other than flat rate. Whereas more imaginative and creative pricing structures, such as time-of-day and network occupancy-related, can help ensure continuing quality and level of service even through periods of congestion.<\/p>\n In terms of the value or revenue associated with transporting a byte operators do face an underlying challenge, as result of the fact that respective revenues per MB (megabyte) for SMS, voice, and broadband data (transport only) are $250-500, $2-4, and $0.03-0.05 respectively. Of course these numbers vary widely by market and are not meant to be sacrosanct. But the basic characteristics of orders of magnitude differences in pricing, with the by far smallest revenue-generating traffic (broadband data) coming to dominate total traffic volumes over mobile networks are unmistakable.<\/p>\n So mobile operators are expected to have to invest in deploying continually increasing capacities, with revenues per MB that decrease compared to their past business models to a notably greater extent than their costs per MB. If in addition high revenue per MB voice traffic, which still accounts for 50% or more of total mobile revenues even in rich countries, becomes part of a broadband data stream at pricing of at most a few U.S. cen So while they may not be sufficient, deployments of LTE networks and exploitation of new or additional spectrum are essential if value-generating mobile data demand is not to be suppressed. Some forecasts of mobile data growth may be “bubble like” and the flood of mobile data traffic may not reach tsunami-like proportions. However, particularly given the length of time it takes to deploy new technologies effectively and allocate new spectrum, now is not the time nor does the evidence justify arguing that the real risk lies in overinvestment in excess capacity in mobile networks.<\/p>\n Mobile Data Traffic Volumes: Bubble or Tsunami?<\/strong><\/a> << Comments and views<\/p>\n
fact that even a small number of simultaneous broadband users in a cell sector can cause a very substantial falling off in the speeds experienced by each one to below acceptable broadband speeds.<\/p>\n
ts\/MB, then the revenue\/cost picture for mobile operators becomes bleak indeed. <\/p>\n