Viewpoints

How will today’s wireless networks cope with the demand for mobile data?

By Mike Flanagan, Arieso

In a recent report from the Kelsey Group and ConStat, it was revealed that while only 26 percent of US mobile users currently subscribe to a mobile Internet service, almost 45 percent cite Internet capability as a key factor when purchasing their next handset. The challenge has been laid down for wireless network operators to provide extensive data capabilities and to make them cost competitive for subscribers. This is going to put a massive strain on their network infrastructure in the coming months.

The increased desire for mobile data usage combined with growing pressure to improve and clarify budget management means that a new breed of optimization tools are required to ensure a balance between data capacity and voice quality while making existing infrastructure work harder and providing justification for investment in new equipment.

The competition created by the demand for data services creates two issues for network operators; firstly, how to cope with the increased demand for capacity, and secondly, how to maintain and improve networks while keeping capital spending under control. This is needed to allow subscription packages to be financially attractive to new users without impacting on the bottom line. An added complication is that even where operators have sufficient infrastructure to handle an increased volume of data traffic, their networks have been historically optimized for voice, so data requires re-optimization.

The answer is not for wireless network operators to simply install new or enhance existing infrastructure and hope that it will solve these issues. The problem is much more complex and has numerous possible solutions.

Capital needs to be strategically applied to support increased data demand and operators are increasingly asking optimisation specialists, such as Arieso, to help them bring consistency and clarity to the way in which they compare and chose which engineering budget request should be approved to achieve specific business goals.

These are interesting times for the wireless industry and we are finding that an increasing number of network operators are asking us for help beyond the optimisation of their existing networks to maximise ROI. We have been working with our clients to develop tools to enable them to make consistent, informed decisions about where and when to invest in equipment and when adapting the existing network can eliminate the need to invest.

Because of the user demand for data services, the way the budget for improving the network is spent will have significant business consequences for operators over the next several years. Pity the executive making the decisions without knowing which of the proposals in front of him will get the results his boss is demanding.

Will wireless operators be left bolting the stable door long after the horse is gone?

Wireless network operators have benefited from being able to apply early termination fees (ETF) to subscribers wishing to cancel their contracts early, but the potential introduction of a new mandate enforced by the US government is set to change all that. Dr Michael Flanagan, CTO Arieso, discusses the effect removing the ETF is likely to have on wireless network operators and how they can avoid losing subscribers and revenue.

The Cell Phone Consumer Empowerment Act 2007 will force wireless network operators to be more transparent in the information given to customers before entering into long-term contracts, and allow users greater flexibility in being able to terminate their contracts without facing charges for doing so. Some of the larger service providers have already introduced pro-rated ETFs, but either through self-enforcement or by government mandate, it looks like the days of ETF are coming to an end.

Operators may find that they have to provide consumers with detailed data on coverage areas and dropped call ratios before signing up to a new network, and allow them the freedom to exit a contract within thirty days without any charges if the quality of service is found to be unsatisfactory. Although the charges won’t disappear entirely, cancelling a two-year contract six months early will certainly be a lot more attractive to customers if they are charged, say $50 instead of $175.

The new bill could effectively remove a ‘tool’ used by carriers in order to maintain customer loyalty. Couple that with number portability, and it looks like operators will need to rely more on good service in order to keep their subscription numbers up and avoid a drop in revenue.

This is, however, much easier said than done and creates two new issues for wireless network operators; firstly how to optimise the existing infrastructure of the network in order to provide a better customer service, and secondly, how to maintain and improve the configuration of the network whilst making sure that capital spending is kept under control.

Further to this, as activity on the network evolves to support greater data usage, service providers will need to find a way of being able to reconfigure the network in real time to ensure that the highest level of service is being delivered.

These are interesting times for the wireless industry and we are finding that an increasing number of network operators are asking us for help beyond the optimisation of their existing networks to maximise ROI. We have been working with our clients to develop tools to enable them to make consistent, informed decisions about where and when to invest in equipment and when adapting the existing network can eliminate the need to invest.

If operators are going to survive the elimination of the ETF, they will need to take a look at how they use existing infrastructure and plan their Capital. It will become more important than ever to optimise their network to meet the quality and coverage demands of the consumer.