NEWS

Mobile broadband network CAPEX could reach 1,000 EUR per subscriber

Press Release – February 16th, 2009

 

The future of mobile broadband looks promising, but network costs are becoming a threat

to the profitability of MNOs at a time of global financial crisis. Intelligent technical solutions

and tariff adjustments can boost profits, but it is more likely that they remain weak or

negative as long as network infrastructure prices are linked to traffic volumes. Meanwhile

the revenue per subscriber is mostly flat. These were the main message from the strategy

experts of Omnitele at the Mobile World Congress in Barcelona, February 16th.

 

New figures from the mobile strategy consultants of Omnitele suggest that network investments in

support of excessive mobile broadband data traffic could reach as much as €1,000 per subscriber.

Continued strong growth in mobile data traffic and the relatively high cost of network equipment

drive the unprecedented and excessively high capital costs, Omnitele says.

 

The high costs could be threat to the continued profitability of mobile network operators, particularly

at a time of financial crisis. “Mobile broadband services are today the mainstay of many leading

mobile operators, as voice revenues continue to be under pressure. If mobile broadband is to

become the new cash cow of MNOs, much stronger and fiercer CAPEX cost analysis and controls

need to be installed.

 

Omnitele suggest a number of measures that are likely to assist in resolving the cost issue.

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.

 

Omnitele points out that in some cases the data volume for mobile broadband may exceed 10

gigabytes per user per month already this year, and volumes are expected to grow exponentially

following overall Internet traffic trends. The high figures for network CAPEX is the result of a

detailed techno-economic modelling and analysis for sample mobile operators given continued

data volume growth and typical network conditions.

 

 

About Omnitele:

Omnitele Ltd. is a pioneer within the wireless industry with twenty years of leading edge network and business

consulting experience worldwide. It was founded in 1988 to set up the first GSM operator in the world and is

owned by Finnish national telecom operators and an external investor. Omnitele’s strengths lie in mobile

network planning and development, technical consulting and operator business development. The aim is to

increase and improve overall operator performance and quality of services, and we thrive to provide best

solutions for deploying new technologies. www.omnitele.com