By Michael J. Flanagan
Wednesday, January 2, 2008
In a recent report from the Kelsey Group and ConStat, it was revealed that while only 26% of U.S. mobile users currently subscribe to a mobile Internet service, almost 45% cite Internet capability as a key factor when purchasing their next handsets. The challenge has been laid down for wireless network operators to provide extensive data capabilities and to make them cost-competitive for subscribers. This is going to put a massive strain on their network infrastructure in the coming months.
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Michael J. Flanagan
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The increased desire for mobile data usage combined with growing pressure to improve and clarify budget management means that a new breed of optimization tools are required to ensure a balance between data capacity and voice quality while making existing infrastructure work harder and providing justification for investment in new equipment.
The competition created by the demand for data services creates two issues for network operators. First, how do they cope with the increased demand for capacity? Second, how do they maintain and improve networks while keeping capital spending under control - an essential factor in allowing subscription packages to be financially attractive to new users without affecting the bottom line? An added complication is that even where operators have sufficient infrastructure to handle an increased volume of data traffic, their networks have been historically optimized for voice, and data requires re-optimization.
The answer is not for wireless network operators to simply install new, or enhance existing, infrastructure and hope that it will solve these issues. The problem is much more complex and has numerous possible solutions.
Capital needs to be strategically applied to support increased data demand. Operators are increasingly seeking ways to bring consistency and clarity to the way in which they compare and chose which engineering budget request should be approved to achieve specific business goals.
A growing number of network operators are asking for help beyond the optimization of their existing networks to maximize return on investment (ROI). They need products that enable them to make consistent, informed decisions about where and when to invest in equipment and when adapting the existing network can eliminate the need to invest.
These products integrate the output from engineering tools with financial modeling and forecasting data. In this manner, each proposal can be compared against a variety of criteria ranging from technical gains (for example, coverage area gains by morphology) through financial benefit (for instance, return on investment). This results in seamless flow between engineering design and the financial approval process.
Because of the user demand for data services, the way the budget for improving the network is spent will have significant business consequences for operators over the next several years. Pity the executive making the decisions without knowing which of the proposals in front of him will get the results his boss is demanding.
Flanagan is the chief technical officer of Arieso. Michael.Flanagan@arieso.com.