Operators in Europe have spent considerable effort over the past few years attempting to increase revenues attributed to data traffic. Following the upsurge in 2010, they can congratulate themselves for meeting, or even exceeding, their expectations.
However, operators might look back over 2010 and worry about the success of what they wished for--given that O2 UK and Orange France both experienced network overload problems in their respective capitals that were attributed to smartphone usage.
A clue to this network meltdown issue might come from consumers in the UK and France being the most enthusiastic adopters of the Apple handsets in Europe, and O2 UK and Orange France held exclusivity on the iPhone for most of 2010.
This problem was exacerbated by a small number of subscribers using their unlimited data tariff plans to download huge amounts of content, or to operate their handsets as tethered modems for PCs or routers.
Commenting on the problem in November, O2's UK CEO, Ronan Dunne, said that the data overload problem was being caused by a minuscule number of users, albeit with insatiable data appetites. "One streamed YouTube video has the same effect on the network as half a million text messages sent simultaneously."
The outcome of this was a rush by the major operators to withdraw their unlimited data plans, followed by calls for content providers to pay for the traffic overload being caused.
While data plans got cut back across many European countries, Vodafone broke ranks and slashed its data roaming fees by 60 per cent for smartphone users travelling within Europe--this move was just ahead of the EU Commissioner responsible for digital affairs stating an intention to force a European-wide cut in data roaming costs by setting a maximum charge of €50 a month.
Regardless of these manoeuvrings, the problem--or opportunity--is not about to disappear. The CEO of France Telecom Orange, Stephane Richard, maintains that he expects to see 10x more data traffic in two years time than Orange carries in its network today.