Do wireless carriers need to enlist intelligent policy and network management controls to continue growing their data revenues profitably? Or will simply throwing extra capacity at the problem suffice? On one side of the argument are vendors that espouse the need for network management policies. On the other, wireless carriers contend additional capacity will keep pace with demand.
Billions of dollars hang in the balance.
It's clearly a critical issue, according to a number of forecasts on the world's desire for data. A June Cisco study found that worldwide mobile data traffic will double every year through 2013, with the total amount of data increasing 66 times between 2008 and 2013. And, according to a recent release from Nokia Siemens Networks, mobile data traffic will outpace voice traffic by 2011, given current growth trends.
Whatever the outcome, carriers will continue to invest billions of dollars in their networks. "It's a reasonably safe assumption that the competitive dynamics in this marketplace will continue to reinforce a climate of aggressive investment," said John Jackson, vice president of research at CCS Insight. "They're going to have to do it."
And top carriers in the U.S. uniformly argue that their network investments in capacity will keep pace with users' demands.
Iyad Tarazi, Sprint Nextel's senior vice president of network development, said operators must invest in vendors and technologies wisely--and can stay abreast of traffic pressures if they do so.
"I believe we're doing enough, and believe others in the industry are also able to do that," he said. "I don't see it see it the same way, that growth is outstripping what we can provide."
Other carriers are counting on continued investment in 4G technologies to help them handle the increase in data traffic. Chris Neisinger, the executive director of network planning at Verizon Wireless, agreed with Tarazi's general sentiments, and said Verizon has enough capacity to meet data traffic demands.
"We anticipate the market, we monitor it and we build ahead. And we continually monitor our usage," he said. "That's in our DNA."
Looking out toward the future, Neisinger said that when Verizon deploys its LTE network, concerns about network capacity will ease. "It absolutely does give us the capacity we need to meet the ever-growing demand of our customers," he said.
The issue involves billions of dollars. AT&T has committed $11.6 billion toward its wireless and wireline networks this year, while Verizon said it spent roughly $17 billion on its networks last year. And Infonetics Research estimated network operators spent around $275 billion worldwide in capital expendatures last year.
Despite the massive investments in networks, analysts are skeptical that capacity alone will satisfy users' desire for data. "It's like putting hot dogs in front of [competitive eating champion Takeru] Kobayashi," said Peter Jarich, a wireless infrastructure analyst at Current Analysis. "You stick it there and it will disappear."
Just a matter of policy?
Whether increased capacity alone will be enough to handle data traffic growth is a major point of contention between carriers and analysts and solutions providers. "On the basis of cell site demand, service providers cannot rely on advanced radio technologies alone to address their traffic demands," Yankee Group analyst Phil Marshall said. "They need intelligent traffic management techniques such as prioritization and possibly fair use regimes."...Continued