Mobile traffic boom to revive struggling base station market by 2011

The widespread success of mobile broadband services — which now have more than 100 million subscribers worldwide using more than 300 networks — is sparking a data traffic boom that will revive the struggling mobile base station market by 2011, according to Mobile Networks Forecasts: Future Mobile Traffic, Base Stations & Revenues, a new strategic report from Informa Telecoms & Media.

Global mobile data traffic is set to increase 1088% from 162 petabytes (PB) in 2007 to 1,925PB in 2012, driven by a boom in advanced applications such as mobile Internet browsing and video, according to Mobile Networks Forecasts.

The report forecasts that global mobile traffic from YouTube and other mobile video streaming applications will increase by 5514% by 2012. Another key factor in the traffic boom is the rise of user-friendly devices such as the iPhone, which can lead to a thirty-fold increase in traffic per subscriber.

But operators will struggle to cope with the traffic boom because the popularity of flat-rate tariffs means that mobile data revenues will not keep pace with traffic — which has a direct impact on costs.

“We forecast that global mobile data revenues will only increase 77% from 2007 to 2012, compared to a 1088% increase in mobile data traffic over the same period,” says Mike Roberts, principal analyst at Informa Telecoms & Media and author of Mobile Networks Forecasts. “This will push current mobile network costs and architectures to the breaking point, and will lead to everything from network sharing and spectrum refarming to the launch of femtocells and next-generation networks.”

The disconnect between soaring mobile data traffic and modestly increasing revenues helps to explain why operators will keep a lid on network investment in the short term. “The mobile base station market will be flat for several years due to restrained operator investment in many regions and fierce price competition among vendors, but base station unit sales and revenues will rebound in 2011 as the mobile traffic boom forces operators to invest in new capacity,” Roberts says.

The mobile traffic boom will also lead operators to increase investment in next-generation networks such as WiMAX and LTE, which can support higher traffic loads at lower cost compared to traditional systems. As Roberts notes, “This will lead both WiMAX and LTE base station unit sales to overtake those of CDMA by 2012, as operators shift investment to next-generation systems.”

Mobile Networks Forecasts also predicts that 2011 will be the year when global mobile data traffic overtakes mobile voice traffic, which has always driven mobile network design, rollout and operation. “The mobile industry is still largely structured around its key product to date, narrowband voice, but that structure is breaking down fast due to the boom in mobile data traffic,” Roberts says. “The rapid transition from voice to data traffic will lead to a fundamental overhaul of mobile networks, as mobile operators and vendors shift their focus from voice to the mobile broadband Internet. This in turn will help drive a wider overhaul of mobile business models and strategy.”

If you would like to talk to Mike Roberts about Mobile Networks Forecasts, please contact him directly at mike.roberts@informa.com or +44(0)20 7017 4203.