The Data Deluge: A Mobile Revolution
A look at how the move to 4G networks will cause the biggest shifts in the mobile world in years. What it means for data, networks, and applications.
By any measure, the mobile revolution has been among the biggest in telecommunications industry history.
The number of mobile phone subscriptions reached 4.6 billion in 2009, compared with roughly 1 billion in 2002, according to the International Telecommunications Union (ITU). This represents growth of 460 percent in just seven years.
This kind of growth is more significant than any other segment of the telecommunications industry. In comparison, there were approximately 1.2 billion landlines in 2008, and those numbers are declining, while mobile connections are still growing.
But the growth of mobile phone subscriptions in itself is not the only significant event taking place. More importantly, mobile phone networks are moving from primarily voice networks to efficient, IP-based data networks delivering complicated, Internet-based applications. This is fundamentally changing the telecommunications industry and its business models. Global service providers are moving from a voice world to a data world.
The introduction of advanced, high-speed mobile devices, such as 3G and 4G phones, tablet computers, iPhones® and iPads® have caught the consumers’ imaginations. At the same time, a range of data-hungry applications is growing like mad: between Apple®’s app environment and Google®’s growing Android platform, thousands of new mobile applications are being added to the mix every year.
Can the telecommunications industry adapt in times of these immense changes? They need to do it quickly. The onslaught of mobile data is just getting started, and the transition from 3G networks to 4G networks will only accelerate these changes, because 4G is based on a data architecture, rather than the circuit voice architecture of 2G and 3G mobile networks.
A mobile phone is no longer only a mobile phone. It’s a sophisticated broadband data-processing machine. This means one thing: more consumers, consuming much more mobile data.
This presents significant challenges going forward. These include:
In some cases, it’s been shown that moving to successful new business models based on data has helped service providers enormously. For example, after the introduction of data services such as ringtones and SMS text services, Average Revenue Per User (ARPU) for major global carriers increased. However, the recession has recently pruned back some of those ARPU gains.
In the case of 4G, the potential for new revenue models and applications is nearly limitless. But the cost and the data demands of these networks will also be rather large. Service providers need to see these trends coming, and prepare now. The growth of 4G data networks will likely represent the biggest shift in their market in more than 20 years.