With mobile demand emerging from the likes of iPhone and Android’s emergence into the market on a grand scale; mobile operators are living vicariously as a web substitute for a consistently mobile society. This has on one hand, created unbelievable sales and use of mobile devices for e-mail, video content, and applications, all 3G enabled, to creating somewhat of a nightmare in predictions of infrastructure meltdowns. Now 4G is upon us with promises of more flexibility in mobile use.
Maybe a new category is being created, like (Mobile Web). It is true that innovation and demand has outstripped the ability of mobile operators to keep pace with the inevitable technology that Apple has created with the iPhone, IPad with other device copiers, along with the app stores springing up in an open source web presence.
How do mobile operators cope with demand?
Demand can be a “double edged sword”. It creates new and improved products; it can cause prices to rise, and it develops more market entries by competitors, thereby possibly reducing prices. However, mobile prices have continued to decline even with high demand as competition is sufficient to deter those increases. At this point mobile operators continue to sign up new users creating increasing demand on their infrastructures with price points that cannot support robust cash flows.
Their need to create new business models not based on just voice and e-mail continues to become critical for future survival and profitability. At this juncture mobile is just continuing to just ride the wave of adding new connections while coping with the demand. See (Mobile VOIP Demand on the Rise, Report Says)
It seems redundant to say infrastructure needs to be upgraded especially in the backhaul arena where things can become tricky in managing video content. Legacy backhaul systems will become increasingly strained to keep up with the load of more and more complex applications. To this end, operators must ensure future viability of the network by upgrading and replacing infrastructure in the backhaul, from the server to the cell tower. This must be accomplished sooner rather than later and before it is a major problem. See (Report: mobile infrastructure market will rebound by year-end)
The FCC has moved forward to reallocate needed spectrum from current users to the mobile industry, which no one doubts should be done. But it is tricky on how to accomplish this scenario. Convince Broadcasters and government entities to relinquish spectrum voluntarily and put up for auction to the highest bidder. This could be challenged in court, but could be treated as possibly (eminent domain). What is the fair value of the spectrum, 500 to 700Mhz, 700Mhz, and 2100Mhz, obviously the lower the spectrum the more valuable it will be to operators? At any rate it should be done as quickly and efficiently as possible. See (FCC eyes more spectrum for mobile broadband)
Mobile operators can continue to manipulate the network by using off-loading to manage traffic. As consumers move from one place to another using their devices, off-loading to WiFi and Femtocells is becoming a common practice. Especially with 3G to 4G technology improving the seamless switching from operator cell towers to WiFi (Hot-Spots) as consumers go inside, to Femtocells in congested and marginal signal spots areas.
Another critical issue for operators is one of creating profitable networks by looking for new business models. Research indicates that current profit models will continue to decline under competitive pricing structures. The mobile community has the opportunity to realize better margins in developing new and innovative markets for video, and apps. M2M and business efficiency applications are a wide-open and potentially lucrative area for operators to explore. From business to home use operators can capitalize on new and emerging technologies of energy consumption monitoring, machine to machine applications, business tracking, emergency response, and government uses. This goes hand-in-hand with network infrastructure upgrades and network management practices. See (Profit Dips at AT&T, but Wireless Business Surges)
Last but certainly not least, is the question of proposed Net Neutrality regulation which proposed equal access to all internet users. This is a flawed policy with an indictment of the ability for Internet operators to manage their networks fairly and efficiently for all users, and have the flexibility to make a profit as technology continues to emerge. Tiered pricing is one of those issues which must be left to the private sector as a price and demand structure. Competition will always trump the pricing issue and the FCC’s focus should be directed to that aspect of the equation.