Mobile operators will need to reduce traffic delivery costs by 50% or face insurmountable network rollout spending, Analysis Mason warns.
The research firm projects that if operators merely try to address surging data demands with more base stations, RAN costs could spiral out of control. In Western Europe alone, RAN spending would reach $40 billion (€30 billion) in 2016, up from $5 billion in 2011.
“Operators can’t afford to spend that sort of money,” Analysys Mason's lead wireless networks analyst, Terry Norman says, adding. “Therefore, operators will either accept network congestion or use pricing to control demand – neither are good business practice. The elegant solution is to make substantial efficiency improvements.”
Norman estimates that Western European operators need to save $30 billion in mobile access network costs by 2016. To achieve that saving, operators should explore Wi-Fi offload to augment existing capacity, using a combination of indoor and outdoor access points, Norman recommends.
“The costs of indoor and outdoor Wi-Fi are both significantly lower than those of upgrading to 4G,” he said.