Mobile internet becomes new battleground for mobile operators

According to CCS Insight, the number of mobile broadband subscribers across Europe topped the 22 million mark at the end of 2009, and is expected to almost double to 43 million by 2011 (or €11 billion in services revenue). In order to stake their claim in this lucrative market, operators will be investing heavily in network upgrades to remain competitive if not lead in terms of mobile internet speeds.

Dave Nowicki, VP, of marketing and product management at mobile broadband equipment provider, Airvana, believes that if operators are to remain competitive without eating heavily into revenues, they need to explore network upgrade strategies that will enable them to reduce infrastructure costs. One option would be for operators to consider following in the footsteps of Vodafone in the UK and Sprint in the US, who have both recently launched 3G femtocell services.

“By offering the fastest mobile broadband network, operators can secure a larger proportion of what has become a significant and lucrative market,” said Nowicki. “The importance of the mobile broadband market to operators is reinforced by the fact that O2 recently conducted research to compare the different mobile broadband speeds available in the UK.”

Nowicki claimed the femtocell, which has the capacity to support mobile broadband, is the answer. Femtocells connect to conventional broadband to provide users with their own dedicated 3G network in their home or office. This helps ensure an optimum mobile internet browsing experience for the user while taking load off the operators existing network infrastructure. In addition the femtocell can provide a platform for a new generation of mobile services, opening up a new area for operators differentiate their service offerings.

“With most operators now offering a range of smartphones, including the iPhone, competition in the mobile broadband space is heating up – customers want to know the data intensive features on their handsets will be well supported by their chosen operator. This suggests network upgrades to deliver performance increases will become a key feature in the battle for customers between leading operators. But while this is seemingly good for the customer, a heated race to upgrade networks could eat heavily into operator’s revenues, increase data costs and ultimately do little to change the dynamics of the market,” Nowicki commented.

Nowicki believes operators are right to see network speed as a key area of differentiation. By offering the fastest network, operators can secure a larger proportion of the market but they have to find smart ways in which to do this to avoid making costly investments don’t deliver a return.

Continuing, Nowicki added: “A more cost effective and immediate way for operators to improve user’s experiences would be to focus attentions on where the majority of mobile broadband and data usage takes place – in the home and office. It is now estimated that nearly 60 percent of all mobile data traffic originates indoors. This creates a strong argument for adopting the strategies of Vodafone in the UK and Sprint in US by adopting femtocells to improve coverage and performance and to offload data traffic. The femtocell ensures an optimum mobile internet browsing experience for the user and provides operators with a smart way of avoiding costly network investments that could struggle to deliver a return.”