63% of network planners face real congestion,higher churn

In a recent survey, Amdocs survey finds 63% of network planners face real congestion, which is leading to complaints and higher churn. There is a growing concern globally over the long-term impact of mobile data. Mobile network operators are hard-pressed to tap new revenue streams to keep their businesses buoyant amid ever-decreasing user revenues from traditional services.

,p>On the one hand mobile data is clearly one of the few growth areas within the sector generating new revenues as new subscriber growth slows and as voice tariffs remain under downward pressure. But on the other hand the current mobile data growth story with a certain degree of skepticism and focus more on the underlying "quality" of revenues especially in terms of their long-term impact on sector profitability.

There is no doubt that mobile data usage is growing substantially as a result of new products and improved equipment functionality. This increasing usage is undeniably translating to new sector revenues.

Social networks like Facebook, Twitter opened up for mobile access, operators have been faced with the challenge of how to cost effectively handle the escalating traffic loads generated by this dynamic group of users.

Mobile ads add to operators’ range of options for fresh revenues from new services. More recently, the brands have been placing targeted ads into applications. Much of the growing success of browsing and app ads is a direct result of the increase in the use and availability of smart phones, particularly across Asia, with more time being spent accessing the internet on such devices. The ability to accurately segment, profile and consequently target users with available and detailed data is a major reason for such success.

To create a viable business model, operators need to optimize their SMS networks to reduce operating costs and leverage the existing infrastructure to create new revenue streams.

Industry experts believe that data growth cannot be termed as positive growth for telecom sector. In fact there are a number of reasons why many are not yet convinced that mobile data growth is an incremental positive on the sector.

Telcos do not appear to be effectively monetizing the surging data usage as reflected in the substantial gap between the data usage growth and data revenue increases. And unfortunately given current pricing structures (driven by the desire of telcos to drive higher data usage), revenue collection per unit of data delivered is likely to remain far less than traditional voice and SMS traffic.

Also there can be a possibility that mobile data margins and return on capital invested will be significantly lower than those achieved for voice and SMS as revenue per MB of data delivered declines at a faster rate than associated costs.

Clearly there will be variations between operators but we expect data to continue the general downward margin pressure.

akankshas@cybermedia.co.in