LTE, WiMAX to boost stickiness, stop churn, save revenues

Next generation wireless technologies such as 3G LTE and Mobile WiMAX will prompt operators to adopt an ‘open access’ mentality, allowing any client device to connect to the network. This will lead to higher service stickiness and reduced churn, analysts say.

Furthermore, as long as operators resist the urge to lock client devices to their respective mobile broadband access networks, the more smartphones, laptops and ultra mobile devices connected to such high speed networks will lead to incremental revenues for mobile carriers.

Research released by analyst Frost & Sullivan on Thursday predicts that by 2013, there will be around 22.4 million LTE subscribers delivering service revenues totalling Eur9.68bn in Western Europe.

Over the past year, mobile data usage has skyrocketed, with six to 14 times more data traffic on mobile broadband networks today than last year – a phenomenon largely driven by flat rate pricing.

But unfortunately, for the operators, revenues remain flat as the traffic load curves upward but cash generation is offset by the flat rate price models. Hence, network cost has to decline and Frost notes there is a strong focus in the 3G LTE camp on margin and production cost, but there will also need to be more innovation in the operators’ offerings.

Frost & Sullivan programme manager, Luke Thomas, said: “Rather than providing flat fee unlimited contracts or traffic caps for 3G LTE and Mobile WiMAX, operators need to be more innovative with their pricing strategies so as to differentiate themselves from competition but, at the same time, ensure that it is not too complicated or non-transparent for the user to understand.

“Furthermore, operators need to put in place effective management tools to manage traffic using QoS policies, prioritised access and flow based processing. Such active traffic management will ensure that operators do not tarnish their brand image by levying huge charges for high speed mobile broadband access,” said Thomas.