Report finds mobile network operators face 7x increase in data delivery costs rising to $370B by 2016
August 4, 2011 – A new report from Juniper Research has found that mobile network operators (MNOs) must explore means of addressing data delivery costs and inefficiencies in base station operations if their networks are to remain economically viable. According to the report, even with the increased deployment and utilization of LTE networks, global MNO data delivery costs could surpass $370 billion annually by 2016, a 7x increase on their 2010 level of $53 billion.
However, the report argued that future operating costs could be significantly reduced by the deployment of data offload solutions, such as WiFi networks and femtocells, allied to the utilization of network optimization techniques to facilitate flow control.
Further savings possible at base stations
Furthermore, the Mobile Operator Business Models report observed the potential for substantial savings at the base station level, identifying both active and passive network sharing as a means of reducing site lease costs and reducing energy loss by using feederless sites and remote radio heads. It also recommended that operators in developing markets that are reliant on diesel to power off-grid generators should accelerate their transition to renewable alternatives.
These measures will additionally enable MNOs to meet their sustainability commitments, as report author Dr Windsor Holden pointed out. “The case for reducing network ineffiency is both environmental and economic. By implementing solutions designed to reduce energy wastage, not only will MNOs markedly cut their operating costs but they will following sustainable business practices which reduce greenhose gas emissions.”
Other findings from the report include:
• MNOs should consider leveraging core assets to develop new revenue streams in areas such as cloud platform provision and M2M.
• Tier 2 operators should continue to offer unlimited data plans to gain competitive advantage.
• Regulatory pricing controls will continue to negatively impact operator margins.
The New Mobile Business Models Video Whitepaper and PDF whitepaper is available to download from the Juniper website together with further details of the study Mobile Operator Business Models: Challenges, Opportunities & Adaptive Strategies 2011-2016.