The rapid and widespread success of mobile broadband services—which now have more than 100 million subscribers worldwide using more than 300 live networks—is sparking a data traffic boom that will revive the struggling mobile base station market.
There is also good news for operators, given clear evidence that the mobile broadband boom is helping mobile operators achieve one of their key strategic goals—increasing mobile data revenues in a bid to offset declining voice revenues. For example Vodafone, the world’s largest mobile operator by revenues, reported £2.2 billion in non-messaging data revenues for the year ended March 31 2008, up 55% from £1.4 billion in 2007, due to “strong growth in business email and PC connectivity devices” along with “strong takeup of mobile broadband USB modems.” The operator says it signed up 2 million consumer customers to its flat-rate mobile Internet plans in 2007.
However the bad news for Vodafone and virtually all other operators ramping up mobile broadband services is that data traffic is growing much faster than data revenues, partly due to the launch of flat-rate mobile broadband tariffs. Vodafone notes that data traffic increased by more than tenfold in the year ended 31 March 2008 compared to 2007, versus a 55% increase in data revenues. And the trend is widespread—T-Mobile reported a 10-fold increase in WCDMA/HSPA traffic in first-half 2007 compared to first-half 2006, and operators reporting at least a four-fold increase in mobile data traffic in 2007 include AT&T and Telecom Italia Mobile. Similarly, Swedish telecoms regulator PTS reports that mobile broadband subscribers in the country increased three-fold from 92,000 in 2006 to 376,000 in 2007, but over the same period mobile data traffic increased nearly ten-fold, from 203 to 2,191 terabytes.
The bottom line is that all mobile operators are facing the same dilemma, and it is only going to get worse. Informa Telecoms & Media forecasts that global mobile data revenues will increase 77% from 2007 to 2012, but global mobile data traffic will grow far faster, increasing more than 1,000% over the same period. The traffic boom will be driven by a dramatic increase in the use of advanced applications such as mobile browsing and video—for example mobile video traffic will grow more than thirty-fold by 2012, according to Mobile Networks Forecasts. The bulk of the traffic boom will naturally happen on advanced networks such as HSPA, EV-DO, WiMAX and LTE, with LTE for example forecasted to see a 70-fold increase in global traffic from 2010 to 2012.