BARCELONA -- Executives from three wireless carriers offered testimony Tuesday showing how an explosion of wireless users and devices are forcing them to expand their networks without necessarily the promise of revenue growth to keep up. See all MWC News.
"Even as we have been facing two fold increases in [wireless data needs], two-fold increases are not expected in revenue," said Thierry Bonhomme, chief technology officer of the Orange Group, a wireless carrier in France and the U.K. with 262 million customers. He spoke on a panel at Mobile World Congress that was moderated by Cisco CEO John Chambers.
Another panelist, Kris Rinne, senior vice president of architectures at AT&T, described a variety of ways that the U.S. carrier with 200-million-plus customers is eeking out efficiencies with its network to drive down costs amid an era of growth.
Much of that growth is tied to increases in video traffic, which Rinne described as "growing hugely, but not effectively or efficiently."
Over the past two years, Cisco has warned that video traffic will continue to mushroom, posing challenges to carriers that innovated around voice communications only. "We believe video will be the next voice," Chambers said.
A third panelist, Dennis Steiger, CTO for Shaw Communications in western Canada, urged Cisco to help in managing dramatic growth in network users, partly by lowering prices for Cisco networking gear and by helping carriers like Shaw manage an array of network technologies. Shaw is converting from a smaller traditional cable and satellite provider to wireless technologies.
Chambers told Steiger that Cisco recognizes that service providers needs to generate more revenues from their investments in Cisco gear, but didn't commit to lowering prices. Cisco is widely viewed by enterprise customers and service providers as offering high quality products at a premium price.
At the opening of the panel, Chambers noted that service providers globally face a situation where "revenues are not growing enough to keep up with expenses."
The panel discussion was held on the same day that Cisco announced a Wi-Fi infrastructure called Next-Generation Hotspots that is designed for carriers to use to supplement wireless network coverage offered through LTE, 3G and other networks.
Cisco announced a new Small Cell Gateway device, which is designed to help integrate various licensed and unlicensed networks. AT&T has been using small cell technology for years from Cisco.
AT&T's Rinne said the carrier is working to create a technology hierarchy for its network coverage that integrates Wi-Fi and LTE with service management software and strategies. AT&T is trying to "scale and open up [its network] while adding a frictionless customer experience that's easy to use, buy and service," she added.
One member of the audience asked whether network operators will continue to find value in their existing switches and gear, making them backwards compatible.
Steiger suggested that network operators have no choice but to continue to innovate and invest in technology and move on, even if it's less than perfect. "This is the time to be bold, not the time to sit on the fence," he said. "Technology will age... in three years at most. Backwards compatibility is a somewhat limited issue for us. If you see the potential to make a disruptive change, you invest, and the [equipment] is going to cycle out in three years if the decision's not perfect."
Matt Hamblen covers mobile and wireless, smartphones and other handhelds, and wireless networking for Computerworld. Follow Matt on Twitter at @matthamblen or subscribe to Matt's RSS feed . His email address is [email protected] .
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