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.
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