Broadband "Overshoot": How Big an Issue?

Fixed network operators, including cable operators and telcos, face two different problems when considering upgrades of their broadband access networks. One danger is not investing enough to keep capacity in line with the level of market demand. The opposite problem is investing too much.

In fact, that is a scenario at least some mobile competitors hope might be the case. "Fixed line broadband will overshoot the performance needs of the market, resulting in increasing data cord cutting as individuals, families, and businesses appreciate the value of mobility more than the value of excess bandwidth," says Russ McGuire Sprint Nextel VP.

That's not an unexpected view,coming from a wireless-only company building high-capacity wireless networks, but it is worth considering.Mobile broadband might, or might not, be a reasonable substitute for users who really want to watch lots of video on their PCs, smartphones or other mobile devices.

But mobile is likely to be quite a reasonable alternative for users who don't stream or download much video, especially if they are fairly mobile, either locally or over larger distances.

Video and Web Drive Mobile Bandwidth Consumption

Mobile bandwidth demand already is driven by video and Web access, a new analysis by Allot shows (click on image for larger view).

And though peer-to-peer applications were the cause of bandwidth fears several years ago, most video activity now occurs using HTTP, meaning it is now part of the Web browser experience.

As is true for backbone networks and fixed networks, voice, instant messaging, email and all other apps besides video and Web applications are a negligible driver of bandwidth consumption.

That doesn't mean revenue reflects bandwidth use. Revenue still is inordinately driven by voice and texting. Over time, that will change. If broadband is what is driving use of the network, then broadband has to become the mainstay of the revenue model as well.

Survey Finds Shockingly Low UC Adoption

Maybe it's just me, but after decades of the industry talking about, and delivering, unified messaging features, and after more than a decade of pushing other features such as unified directories, find me-follow me and other "unified" communications features, it still does not appear that all that many organizations really are using them.

Or so it would appear after a survey of 544 information technology professionals in the United States and United Kingdom by Freeform Dynamics.

The study suggests there currently is what some of us might call "shockingly low" adoption of unified communications. You might have thought otherwise, given the shift to new terminology such as "unified communications and collaboration." That might suggest saturation of UC, and a need for UCC.

The Freeform Dynamics might indicate something else: perhaps customers are not so enamored of the UC solutions they have been offered. Suppliers can react in a couple of ways. Maybe customers and prospects simply do not understand the value, in which case marketing and education should do the trick.

The other tack is to humbly acknowledge that the solutions we have been offering do not add enough value, do not offer additional value at the right price points, or that there are unarticulated problems we have not addressed.

The Freedorm Dynamics study might suggest that the industry has not yet found the "killer app" that makes UCC or UC intuitively valuable to most prospects and buyers.

IT Professionals Don't Think Much of Enterprise Communications, Study Suggests

In a recent survey of 544 information technology professionals, Freeform Dynamics discovered that relatively few U.K. and U.S. IT professionals are satisfied that their communications capabilities are highly efficient and effective.

Except for firms with fewer than 10 employees, less than 20 percent of respondents indicated their communications capabilities were, in fact, very well suited to current business requirements.

You may take that as a good sign that much upside continues to exist for unified and advanced communications that IT professionals believe really help their organizations perform more effectively.

But you might also take it as a sign that the industry, collectively, has done a poor job of creating and delivering on solutions that IT professionals believe are well suited to business requirements. Either way, the Freeform Dynamics study suggests there is much opportunity to provide solutions that actually are perceived to deliver value.

One is tempted to say we haven't done a very good job with unified communications, but it might be worse than that. We might not have done such a great job with communications, period.

Wi-Fi Now Crucial for Mobile Networks

A new study by Coda Research Consultancy predicts that Wi-Fi enabled mobile handset penetration in the United States will grow at 25 percent compound average growth rates between 2009 and 2015.

Most of that growth will come as smartphone sales pick up, and the Wi-Fi capability will be crucial for mobile service providers attempting to maintain high quality service. Since much data demand is created by smartphone users, networks can offload quite a lot of traffic to Wi-Fi-connected fixed networks using the Wi-Fi capability.



It's a "win-win" situation. Users often will discover their devices perform faster on Wi-Fi, while mobile service providers can conserve capital investment. Some users will find Wi-Fi helps them manage their bandwidth caps. Also, Wi-Fi-equiped smartphones will make fixed connections at home more valuable as well.

User Behavior Changes Mobile Device Design Priorities

Smartphones get used for work purposes, to be sure, but what really seems to make mobile Web and Internet access behavior different from PC behavior are the things people do on their mobiles. And the Apple iPhone, as much as anything else, points to where we are going.

It isn't so much that users increasingly listen to music, play games, use social networking sites and send instant messages on their mobiles. Users can do those things on their PCs as well.

They use the Web, catch up on news or watch videos on both mobile and fixed PC platforms. But there seems little doubt that, for most people, it is personal and entertainment apps that increasingly are important, not keeping up with work activities.

We used to describe this behavior as requiring smartphones that balance work and personal life. These days, the emphasis for device design seems deliberately skewed to personal usage modes. That isn't to discount continuing use of smartphones for work purposes. But it is to note that device design has moved well beyond "productivity."

In fact, design priorities seem almost to have flipped. Where it once was important to handle email and calendar well, it now seems important to handle Web, music and navigation applications well, while also supporting email and calendar functions.

Multiple Tools Needed to Preserve Mobile Bandwidth

Chetan Sharma Consulting forecasts that if left unchecked, the costs of delivering mobile data will likely outstrip incremental revenues by the second half of 2011 in the U.S. market and become unsustainable by 2013.

The rapid growth in mobile data costs has prompted operators to look at more sophisticated network congestion management strategies that fall into four categories: policy control, data traffic offload, infrastructure investment, and network optimization.

Shifting data traffic off a congested mobile network and onto another access technology fundamentally changes the economics of delivering that data. Offload is being implemented by operators globally, including offload to Wi-Fi and offload to femtocells.

Operators deploying a mixed multi-access offload strategy can expect savings in the range of 20 to 25 per cent per year. In the US market, operators will save between $30 and $40 billion per annum by 2013 through an offload strategy alone.

More-efficient new networks will help as well. Infrastructure evolution to 3.5G (HSPA) and 4G (LTE ) lowers the cost-per-bit for data throughput on the network, thereby reducing overall costs.

Chetan Sharma Consulting forecasts that evolving to HSPA and LTE will result in cost savings of just under 20 per cent or almost $25 billion per year in the U.S. market by 2013.

Network optimisation, through techniques such as compression and caching also adds incremental
savings by reducing the total number of bits traversing the network. Typically, Sharma reports,
operators can generate savings of five to 10 per cent by 2013 through this strategy.

Anecdotally, operators have reported that 80 per cent of the traffic in urban centers is being
generated by 10 per cent of the cell sites. So policy control (how, when and under which circumstances subscribers can access networks) can contribute annual cost savings of over 10 per cent, equating to over $15 billion in annual cost reduction by 2013 in the US market, Chetan Sharma says.

But cost reduction is only one side of the equation. Tiered and usage-based pricing also is required. Such policies need not be heavyhanded, top-down service provider rules but rather flexible, dynamic, and personalised pricing models that reflect subscribers’ preferences and context.

Taken as a whole, all the optimization techniques and new pricing models will be needed as the whole mobile business changes from a voice revenue model to an "bandwidth-based" business.