07 Dec 2011

2012 Predictions & Trends for Cellular / Mobile Industry

Our Editor, Ian Poole looks at the predictions and analysis for the cellular industry trends and development in 2012

What will next year bring? While it is not possible to totally predict the future, mobile industry experts have a real insight into the trends and developments that will appear on the horizon and how these will affect the cellular ecosphere. Their analysis will bring some clarity into these predictions.

It is likely that 2012 will bring some big changes. Not only will technology move forwards in the mobile industry but the current economic situation will have a major impact as well. The overall cellular trends should not change, but they may take a slightly different course or be delayed somewhat.

The economic situation will not stop technology moving forwards, but it is slowing the pace of investment. Some test equipment manufacturers have said that operators are moving forwards cautiously. They are still gaining the top headlines, but the actual investment is slower – roll outs are only occurring in the major population centres and wide area deployment is occurring more slowly.

Data trends

Beyond this the major trends are still moving forwards. It is anticipated that data will overtake voice as the major network tariff. In 2011, smartphones increased their hold on the market worldwide and this has driven forwards the usage of data.

Commented Jonathan Bell, VP of Product Marketing at OpenCloud: “Operators continue to successfully use monthly fixed-price bundling (comprising minutes, text message and data) to retain revenue and service usage against Over The Top (OTT) players.”

“However, operators will start rebalancing tariffs in 2012 so that ‘access and data’ is the core tariff, with voice and messaging services bundled on top. This is opposed to the current model of voice being the core tariff with messaging and data sold as add-ons. Charging for data will become more of an issue for operators. This is because there is going to be much more data use that requires monitoring, but is still included ‘in the free bucket’. In 2012, operators will increasingly adopt strategies to off-load the ‘simple’ charging interactions that account for the bulk of the load on their Online Charging System (OCS).”

It has long been established that there will be a data explosion, and operators are actually seeing this happen. While some predictions tend to be wildly optimistic, in terms of the growth rate, operators need to get it right. Insufficient capacity and they will not be able to meet their users’ needs. Overcapacity and they will invest too much and costs will rise and ARPU will fall.

It is for this reason that many of the new LTE roll outs are proceeding cautiously. Many individual and corporate users are not taking up on all the available facilities because of financial constraints. Some users are not upgrading phones as fast, and therefore the market is not developing as fast as people had predicted even a year ago. Accordingly operators are tending to slow down their roll-out plans.

In addition to this there will be changes in the way data is used. Doug Suriano, CTO of Tekelec said “Mobile data traffic patterns will become more unpredictable, especially with the expansion of LTE. Operators will have to deal with more long-form video being delivered to high-powered smartphones and tablets on LTE networks, for example. In addition, M2M growth will lead to irregular patterns of machine connectivity and data transmission. The biggest wild card of all, however, is the LTE iPhone. The combination of the device’s ‘cool’ factor plus Apple’s ingenuity and sparsely populated LTE networks will make for another steep learning curve for operators.”

Regulatory changes for level playing field

The debate on net neutrality will continue and grow in its importance in 2012. It is likely that the decisions made by the regulators will increasingly be challenged by operators.

It appears likely that more operators will launch service specific rating plans, especially in developed markets, while global regulators will bring in further legislation to prevent billshock. These elements working in tandem will mean that operators will increasingly look to split architecture charging systems to reduce the cost of charging evolution.”

Commented Bell at OpenCloud “We think that OTT service providers will continue to demand the “Netherlands” interpretation of net neutrality (following the precedent set by the Netherlands regulator which ruled last June that mobile operators could not charge more for voice calling conducted via the Internet) should be adopted more broadly – and for network operators to push back as equally hard. Furthermore, in the light of this decision, we expect operators to seek to protect their operations and press for more regulations to be brought to be bear on the OTT players themselves.”

Bell also continued: “Another response to the growing power of OTT players, could see operators in 2012 launching their own Voice over Internet Protocol (VoIP) to create two-tier voice tariffs, ahead of the launch of HD voice and VoLTE – which will increasingly come into focus.”

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