MWC - Mobile broadband could cost operators �1000 per subscriber

The cost of supporting mobile broadband customers is threatening the profitability of the operators

Figures from Omnitele suggest that operators could face bills of up to €1,000 per subscriber for the capital infrastructure needed to support the mobile broadband data traffic they generate, mainly due to the high cost of network equipment.

The problem, according to Omintele, is that network infrastructure prices are linked to traffic volumes, and revenue per subscriber is mostly flat.

“Mobile broadband services are the mainstay of many leading mobile operators, as voice revenues continue to be under pressure,” said Pal Zarandy of Omnitele. “If mobile broadband is to become the new cash cow, much stronger and fiercer capital expenditure cost analysis and controls need to be installed.”

Omnitele suggests a number of measures that could help control costs.

“It is very important to control the peak traffic of heavy users, as this traffic load often dictates the size and therefore cost of the network. We also strongly advocate a reassessment of the pricing schemes proposed by network vendors, as well as having a critical look at the retail pricing of existing data service packages,” said Antonios Drossos, vice president of Omnitele.

Some mobile broadband users are already consuming 10 gigabytes per month. Volumes are expected to follow overall Internet trends and grow exponentially.

Omnitele’s figures for network capital expenditure are based on an analysis of sample mobile operators given continued data volume growth and typical network conditions.

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