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26 exabytes of data traffic in 2010

Mobile data boom forces investment

As smartphones and app downloads redefine the end-user mobile experience mobile carriers are facing a mobile data traffic boom that is rippling through their networks. 

ABI Research estimates that $12.5 billion will be spent on mobile gateways, subscriber databases, IMS, session border controllers, and software switch/media gateways in 2011. That represents an increase of 4.2 percent year-on-year (YoY).

“Operators are investing significantly in their core network architecture, not just to speed up the throughput on their networks but also to make those networks more efficient and ‘aware’ of the traffic passing through them,” says Aditya Kaul, Mobile Networks practice director at ABI Research.

Why these investments in the core network? It is well known that voice revenues are declining. In 2010, global mobile voice revenues declined -0.7 percent YoY, yet mobile networks carried 26.1 exabytes of traffic.

While that traffic does benefit from IP’s greater efficiency, operators need to create additional revenue opportunities and constrain operating expenses wherever possible.

Overall capital expenditure by the global mobile operator community is projected to decline slightly (-1.2 percent) to $110.3 billion by the end of 2011.

“Yes, operators will need to invest significantly in 4G,” comments VP for Forecasting Jake Saunders, “but they will be striving to reuse existing cell-site towers, backhaul infrastructure and core network data centers.

“The initial strategy will be to secure as much population coverage as possible for the most efficient investment profile.”

 What's the best smartphone?

While 4G will require upgrades to radio access networks, backhaul, and core network architectures, operators are also seeking optimized products and services to maximize their return on investment.

Operators will increasingly rely on outsourcing their network management to vendors and on small-cell technology for base station deployment, as well as embracing offload strategies (Wi-Fi, content delivery networks, direct tunneling) to maximize network efficiency.

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