Truly Mobilising Broadband - Can Operators Really Cash This Cow In?

Opinion by Arie Baak, product marketing director, Acision

Mobile internet has undeniably turned a corner in 2008, showing unprecedented growth levels. By 2012 a nine-fold increase in mobile broadband revenues is expected. However, driven by peer to peer and video services, traffic levels are expected to grow much faster to well over 20 times todayÃ's volumes. These numbers are a wake-up call to mobile broadband providers. Clearly demand is there, but is there also a sustainable business case?

Acision expects that if operators carry on pushing mobile broadband in the same way that they do today, mobile broadband will crash and burn and so will the revenue opportunities. In order to secure a profitable future, mobile broadband providers will need to focus on a number of critical issues or risk having to take other measures to curb usage. One such example is Vodafone in the Netherlands, although not widely publicised the operator recently reduced its mobile internet offering from 3.6 MBps to 256 Kbps in the Netherlands for new customers. Notably they revised this after negative customer feedback.

To succeed in broadband, operators need to consider:

1. ARPU levels to address profitability providers need to embrace an Average Revenue per MegaByte paradigm where focus lies on raising the profitability per delivered MB instead of the traditional ARPU model.

2. Optimising traffic flows for all devices, from mass market phones to wireless enabled laptops, to bring down the billions of additional backhaul investments mobile broadband providers are forced to make.

3. Minimising peak hour traffic is the essential enabler for reducing additional capacity investments. Operators need to evolve beyond todayÃ's crude monthly quota management capabilities and introduce sophisticated policy management to control application access for individual customers, especially during highly contested periods or locations.

4. Build compelling and differentiated customer offers to provide up and cross selling opportunities, helping mobile operators to develop their offerings beyond a bland access model, truly expand their customer base and raise ARPU levels, e.g. home packages with a ‘homeÃ' QoS including a shared family bundle, roaming packages with special roaming bundles, gaming, P2P, entertainment and business oriented packages.

Operators will not automatically achieve a high quality and profitable mobile broadband service and need to actively address these challenges in good time to secure a profitable future. In order to reap their own cash cow, operators must invest in optimisation capabilities, manage individual service usage, create differentiated packages, maintain quality of service and invest in new platforms that control all services across voice, messaging and broadband. Telia, the Swedish fixed-line and mobile operator, is one provider that is planning to increase its mobile subscriptions to ensure a positive return on its investments in the future. By offering unlimited usage at an increased fixed monthly fee, the Swedish operator is positioning mobile broadband as a fixed alternative, while protecting its investments.

Posted to the site on 9th December 2008