A victim of its own success

Global subscribers to mobile data services reached 186 million in 2008 largely thanks to the adoption of the iPhone and Android devices. But the impact has been on more than the top line as networks strive to reduce traffic and increase capacity.

Mobile broadband is fast becoming the key revenue driver for operators in mature markets, spurred on by the rapid adoption of data-hungry smartphones. But as data usage increases, so does network congestion, and key players have been found to be providing a sluggish user experience.

In the last couple of years the industry has experienced something of a perfect storm, with data friendly devices coming along in the shape of smartphones like the Apple iPhone, Google‘s Android and the Palm Pre; network technology such as HSPA providing enough throughput; and mobile internet access via dongles becoming affordable. As a result, global subscribers to mobile broadband services reached 186 million in 2008, and figures are set to soar by the end of 2009.

But this long awaited mass adoption of mobile data services has hit the network operators hard and at a time when further investment in infrastructure and operating expenditure is an unwelcome consideration.

A recent comment from Derek McManus, chief technology officer for O2 UK, which has seen the effects of this explosive adoption of data services first hand, as the exclusive carrier of the Apple iPhone in the UK for two years, puts this phenomenon in context. “Watching a YouTube video on a smartphone can use the same capacity on the network as sending 500,000 text messages simultaneously,” he said.

Moreover, this perfect storm of devices, throughout and affordability has brought about a sea change in the way consumers and businesses use their devices. “In the past 12 months the mobile industry has seen an unprecedented change in demand. The introduction of world-class devices, in combination with a wide variety of data applications, has brought about a dramatic change in customer behaviour and created an exponential demand on mobile data networks,” McManus said.

Towards the end of November, O2 UK announced plans build out 1,500 new network sites in 2010, in order to beef up capacity across the country. Over 200 new sites are planned for London alone, 40 of which will be live by Christmas 2009. McManus said the investment will cost hundreds of millions of pounds and follows a £500m investment over the last two years in order to meet fast growing demand for data services. A precursor to this investment and a move to reduce opex was seen earlier this year when O2 and Vodafone announced a pan-European network sharing agreement that in the UK will see both companies focus on joint building of new sites and the consolidation of existing 2G and 3G sites.

This hefty investment may come at just the right time. Recent research released by Informa Telecoms & Media and mobile internet platform provider Bytemobile highlights the effect of download speeds and file size on the mobile broadband user experience in the UK.

Informa tested the UK’s mobile broadband networks including O2, Vodafone, T Mobile, 3UK and Orange, and MVNO offerings from BT and Virgin Mobile between June and August of 2009. The research measured total webpage size and download time with Amazon, Facebook, Lycos, Orange, Starbucks and Informa’s homepages using two netbooks when networks were under the most strain across five locations in Greater London.

A selection of urban sites were chosen, including dense office locations during mid-morning hours and lunchtime, residential areas during evening hours and train stations during early morning hours. Netbooks were chosen in favour of notebooks since operators are now bundling them with mobile broadband connections. Moving forward, it is expected that this set up will be one which most users are likely to be using outdoors with a mobile broadband connection.

During the tests, T-Mobile, O2, BT and Vodafone—which all use optimisation software for their mobile broadband services—consistently showed a better performance when compared with the rest of UK operators, illustrating that optimisation plays an important role in reducing traffic and indirectly increasing capacity.

Measurements indicate that file size is significantly reduced when optimisation is used, without any noticeable difference in image quality from a user perspective. In several cases where static web pages were measured, file size reduction was as high as 45 per cent, indicating an effect similar to that of increasing radio capacity.

Informa discovered that the costs of delivering data and subscriber data consumption (including gaming and video) outweigh an operator’s ability to improve network infrastructure as two per cent of subscribers consume 50 per cent of network capacity. So how are operators going to address the influx and demand on data? Optimising through packet handing uncovers capacity constraints and compression is not the silver bullet as web content is complex; containing rich animated multimedia images as well as objects like Adobe Flash.

According to Informa, there are three choices available for operators: experience saturation; upgrade hardware at base station level; or deploy the cost efficiencies of optimisation without upgrading infrastructure. In this case, mobile broadband optimisation can cuts file sizes and create an increase in radio capacity, more space for new customers and an enhanced browsing experience without disrupting quality.

Access to an adequate mobile broadband service is also high on the government’s agenda. At the end of October the UK put into action plans to bring enhanced mobile broadband coverage to as much as 90 per cent of the country, following recommendations made by the Independent Spectrum Broker (ISB), Kip Meek, on how to make the best use of the country’s digital spectrum.

Meek’s proposals were welcomed by the government’s Digital Britain report, and will make available parts of the spectrum suitable for mobile broadband and 3G to offer more sophisticated services and applications. The plans also address mobile phone ‘not spots’ – coverage dead zones in some rural areas.

Commenting on the proposals, UK minister for Digital Britain, Stephen Timms said: “This package will free up the airwaves for the expansion of wireless and 3G services, increasing their reach to consumers and businesses across as much as 90 per cent of the country, including rural communities.”