NEWS
Analysts have made much of the growing mobile data volume to revenue gap - but the gap could become a gulf within five years.
According to Nokia Siemens Network CEO Simon Beresford-Wylie, mobile data volumes will grow 300-fold between now and 2015 yet revenues will grow just threefold over the same period.
While threefold revenue growth is still "very significant", Beresford-Wylie told delegates at the Mobile World Congress trade show last week, it's still "an order of magnitude less" than the growth in data consumption.
The growing disparity will require "extreme efficiency" from operators and "very significant investment in the access and transport layers", he added.
A recent report by analyst Strand Consult says many European operators are currently selling mobile broadband for less than it costs them to provide the service.
Sol Trujillo, CEO of Australian incumbent telco Telstra, told delegates at MWC that, if true, a 300-fold traffic to threefold revenue scenario "isn't going to work well" for operators. "I have a responsibility to make money," he added.
Dr Paul Jacobs, CEO of chipmaker Qualcomm, however said a host of new business models will be created by the advent of mobile broadband.
"What does mobile broadband bring to the industry? A lot of opportunities not only for us but a whole lot of new partners we can work with," he said, with financial services and healthcare as likely candidates.
Comments
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1. Ken Figueredo
There's a missing piece to this discussion. Yes data volumes and transport revenues are going up but costs happen to be going down. It's up to the operators and infrastructure suppliers to ensure that costs are going down at a rate that is profitable to the industry.
There are also other ways to drive revenues through services as distinct from transport as the Asian MNOs have demonstrated.
2. Nick Cole
It is sheer greed to assume that a 300 times volume increase is out of step with a 3 times revenue increase. A piece of infrastructue will cost a certain amount and can carry any amount of traffic up to its maximum. It is only if the cost of providing a 300 times capacity infrastructure costs more than the 3 times revenue that there is an issue. Frequently infrastructure capacity goes up in 10 times order of magnitude, so as long as that step in capacity is matched by the revenue gain then all will be well.
The concern seems to be about continuation of the gravy train. And of course the infrastructure, being electronic, is of relatively fixed cost regardless of throughput unlike the old mechanical systems which needed massive amounts of traffic related maintenance. Lets have some realistic assessments and supporting evidence rather than hysterical panic and unreasoned complaints.