It’s time operators got a handle on mobile data traffic

Posted by Julian Bright Wednesday, November 12th, 2008

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A leading vendor says that as much as 90% of mobile broadband capacity on HSPA networks is being swallowed up by just 5% of high-volume users, who are on flat rate data plans tied to data cards and USB dongles. These numbers are extreme and may not be representative of all operators’ experiences, but even if the true figure is closer to 15% of users hogging 80% of bandwidth as some commentators suggest, mobile operators could be in trouble.

It’s an imbalance that will almost certainly prove unsustainable, particularly now that operators are successfully driving up mobile broadband usage with attractive tariff packages for customers with regular handsets and smartphones. These new subscribers, who unlike their flat-rate counterparts pay for their data usage on a per-bit basis, already outnumber PC and laptop users four to one.

A particular worry for operators is the high level of peer-to-peer (P2P) traffic being generated by those same flat-rate users, and which accounts for around 60% of today’s mobile data traffic. Fixed operators have already struggled mightily with P2P, and one lesson emerging from their experience is that operators need to tackle it early and well. In order to prevent P2P from swamping their networks some mobile operators are already limiting its growth either directly or indirectly through fair usage policies and usage caps.

But there is no escaping the fact that as data traffic rises the disconnect with revenues will become further exacerbated. One way to redress the balance and ensure that costs can scale more in line with traffic growth, is for operators to move even faster to slash their cost per bit across the board, including in the radio access, backhaul and core networks. The traffic-to-revenue ratio is never going to achieve the 1:1 level that it does with voice, but at least they can strive to get closer to that figure.

Effective traffic management and control mechanisms can also help to ensure that users get their fair share of network bandwidth, as long as operators are equipped to carry out the necessary deep packet inspection techniques and implement the necessary controls using quality of service monitoring and service differentiation.

The flip side to this of course, is that flat-rate users are also a valuable asset for mobile operators. The majority use only a small proportion of their monthly allowances and are fairly profitable. So in the process of managing growing data traffic mobile operators won’t want to alienate a valuable part of their subscriber base. But equally, they’ll want to welcome the growing number of new subscribers and provide them with a good experience, since that’s where most of the growth is today, and where it will come from in the future.