Significance of mobile data growth

Whilst this blog often picks up on topical news, sometimes I am prompted to reflect on some of the meta-themes that provide the context for day-to-day news.

I have recently been thinking about the issues facing the mobile telecoms industry over the medium term and it seems to me that thread that ties it all together is the growth of mobile data traffic. The trend is highlighted in Ofcom market research and confirmed by recent mobile operator results announcements.

Some of the drivers and issues connected with the growth of mobile data include:

  1. The increasing penetration of smart-devices. Whilst Apple devices captured the early adopters and opened up the market, the affordability and availability of android enabled handsets is pushing this into the mass market. With Nokia being slow to react to this shift, this shift is changing the competitive landscape. 
  2. Mobile Apps and importance of social media. Twitter, Facebook and instant messaging have become more important to a generation of digital natives than voice telephony, and their integration into customers’ daily lives continues to drive mobile data usage. The vertical disaggregation of the service market enabled by independent app development means that apps (rather than network or handset) are assuming a greater role in the buying decision for certain customer segments. With the success of LinkedIn’s IPO this week and twitter being held responsible for issues as diverse as the Arab Spring and footballers’ morality this will continue to feature in the news.
  3. Pressure on mobile network capacity. Existing 2G and 3G network are increasing stretched by the increasing volume of data traffic. Responses include investment in new technologies (HSPA+, LTE), hand-off to wi-fi, customer deployed femtocells and perhaps in the future WiMax as well as infrastructure sharing arrangements.
  4. Requirement for additional spectrum. The deployment of new networks requires additional spectrum (ideally in the sub 1GHz sweetspot) and the conduct and outcome of upcoming spectrum auctions (e.g. the 800 MHz and 2.6 GHz spectrum in the UK in 2012) will be critical to the medium term future of mobile operators’ businesses.
  5. Regulatory attack: net neutrality. Whilst so far European and UK regulation has been relatively benign, as mobile data increasingly becomes priced not only by volume but also by quality of service, one area where we will likely see a divergence of views between the mobile operators and online aggregators will be whether the net neutrality concepts being discussed in the context of US fixed broadband jump into the mobile world or across the Atlantic.

About Rob Bratby

Telecommunications, media and technology lawyer advising companies across Europe and Asia
This entry was posted in Belgium, Commercial activity, EU, France, Germany, Government policy, Mobile, Spain, Telecoms, UK, WiMax and tagged . Bookmark the permalink.

1 Response to Significance of mobile data growth

  1. Pingback: Mobile banking and payment: what consumers really want? | Watching the Connectives

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