Market
Disproportional market growth, ever changing environment affecting people’s everyday business worldwide, a market driven by the users and not necessarily by the operators. Does this sound familiar? The Telecom Industry has shifted in the last decade, more than it has over the previous 50 years. From landline using the Operator’s network for phone calls to the current usage of video conferencing, Voice over IP (VoIP), Social media, streaming music, streaming TV, online banking etc, the list can be even longer, the users, independently from being a business user or a private user, are getting dependent on good quality service at all time from anywhere. The globalization of the world make people travel and expect an affordable service wherever they arrive.
Trends
The analyst firm Gartner states that the world has five billion mobile connections in 2010 and is expected to grow to 50 billion mobile connections globally by 2020. This is a tremendous growth where connections will be generated, not only from mobile devices but also equipment driven and steered over IP. According to Cisco’s research, the video traffic in 2011 consumed 52% of total traffic capacity where only 1 percent of the users globally consume 24% of the total mobile traffic. The traffic generated by Smartphones represents 82% of the total global handset traffic albeit it only represents 12% of handsets globally. However, the smartphone penetration is growing. Another growing device category is the smart pads or tablets which tripled to 34 million devices from 2010 to 2011.The tablets consumes with margin more than 300% more traffic than smartphones. By 2016, It is also expected that mobile connected tablets will generate as much traffic as the entire global mobile network in 2012.
Challenges
The exponential growth of connections and the growth experienced and predicted over the coming years, require a growth in the capacity in the operator’s networks. This along with the “pickiness” of consumer behavior where the reality of the market is characterized by high churn or customers moving from one operator to another due to lacking service creates a forced situation for operators to invest in infrastructure. The winner is believed to be the operator with the best service in the network both on the Radio segment (licensed) as well as the Wi-Fi (unlicensed) segment. The exercise to build out is related to heavy investments especially when building out Radio networks.