The Future Needs of Mobile Network Operators

By : Antonis Hontzeas

Todays mobile communication networks may be considered to be at a crossroad. Current subscriber demand for high quality undisrupted mobile communication service implies continual maintenance and upgrades of the existing circuit switched voice networks. Increasing demand for multimedia communication services requires high quality bandwidth and capacity availability in a resilient and cost effective manner.

Mobile Market Transformation

According to the UMTS forum white paper Recognizing the Future of Mobile Broadband , Mobile broadband subscribers and revenues in the top five European markets are forecast to nearly double by 2011. Subscriber numbers are predicted to rise from about 22 million at the end of 2009 to over 43 million in 2011 and revenues to rise from less than 6 billion in 2009 to more than 11 billion in 2011

In any multimedia session, a laptop generates the equivalent signaling load as 1300 basic feature phones, a smartphone generates 10 times more traffic than a basic phone and an iphone generates up to 30 times more signaling traffic and equivalent load than a basic phone with speech capabilities. In addition, mobile video capabilities consume 100 times more bandwidth than normal speech calls and create a signaling load equivalent to sending 500,000 SMS simultaneously from a basic mobile phone. Canadian operator Rogers Wireless stipulates that network demand for mobile video is expected to increase about 200% while network demand for music downloads by about 160%. Operators are thus facing increasing pressure from a plethora of new devices and peer applications to upgrade their systems to high quality, high capacity broadband capabilities; while revenues at the same time are leveling off (the commoditization effect of voice and SMS traffic) putting financial pressure on the operator and the mobile operators ability to preserve targeted Return on Investment (ROI), while adequately maintaining and evolving the supporting network.

Converging Divergent Business Habits

Mobile operators and internet companies have to somehow close the existing negotiation range and converge to a commonly accepted business model and way of working. Telecom operators in the past and today, through technologies such as IMS focus on quick and high quality service delivery, and interconnectivity,interoperability and interworkability. A service introduced into a mobile network is designed, tested and rolled out in such a way that it remains transparently available through all cooperating networks, and with the highest possible negotiated quality, always preserving network integrity. Internet companies on the other hand design applications with a peer to peer strategy, taking for granted network existence and resilience and many times strategically positioning their products to limit the network to a carrier type of role.

Reducing Total Cost of Ownership

In response to the users' increasing demands for high quality wireless anytime anywhere broadband connectivity, operators are gearing up and accelerating their deployments of broadband access systems. Where WCDMA took four years to reach 100 deployments, over 100 HSPA capable access systems were deployed within a year's time. HSPA+ is anticipated to become mainstream by 2013 and LTE a couple of years later. In addition, new technologies have introduced innovative techniques to push more throughput out of a communication session, without straining the limits of a particular radio channel. Since Shannons Laws put a limit on how much more throughput can be achieved from an existing communication channel, new techniques such as MIMO and OFDM increase communication in a cost effective manner respecting both engineering and economic efficiencies. A study by Analysis Mason using about 10,000 base stations has concluded while WCDMA has a cost benefit of about 0.06 Euro per bit, HSPA+ increases this benefit to 0.03 Euros per bit and LTE promises, in addition to Total Cost of Ownership improvements from self tuning self optimizing capabilities, to increase the stated benefit to about 0.01 Euro/bit.

Networks First, Applications Soon

Mobile operators are thus challenged to provide high quality revenue generating speech capabilities coupled with broadband network upgrades that will capture this new incoming broadband application market. A common dilemma faced by operators and technologist is whether to wait for new applications and then move towards the broadband path, or install broadband capabilities first.

History has shown broadband and powerful computing capabilities produce an ecosystem that quickly incubates new ideas, new technologies and applications. In the case of the personal computer, interesting multimedia applications appeared only after the necessary computing power and multimedia technologies were in place. In the case of telecommunications, broadband radio systems such as LTE, fixed technologies such as fibre and high speed DSL, and cost saving engineering and economic practices such as convergent systems, network sharing, spectrum harmonization, co sitting and perhaps network outsourcing and managed services (with the respective legislative support to protect intellectual property rights and idea ownership) will surely produce the necessary support environment to allow the visionary, the entrepreneur and the dreamer to flourish. This also means that the successful future players will be those ( regardless of whether they are mobile operators, web companies, individuals or a healthy mix of all) that will effectively and imaginatively combine the inventive entrepreneurial spirit with the required team spirit to ensure that the target subscriber base is offered the best services possible, at the most representative price.

Sources:
1. UMTS Forum, Recognizing the Future of Mobile Broadband: July 10, p. 5. 2. Nikos Katinakis VP Strategy and Technological Development ,Technological Solutions and Greater Use of Commercial Networks: Rogers 2010 3. UMTS Forum ,Mobile Broadband Evolution : the roadmap from HSPA to LTE: Feb. 2009, pp. 5,12 4. Analysys Mason, Wireless broadband forecasts for 20082015: HSPA, HSPA+, EV-DO, LTE and WiMAX, July 2008