If there is such a thing as the hot topic in telecoms, Mobile World Congress is where you will find out about it. And right now the issue that is taking up more time than anything else in the minds and engineering departments of service providers as well as vendors it is the explosion of data over mobile networks.
Most of the focus in this area is on the ability of networks in North America, Western Europe and the advanced economies in Asia to handle the vast increases in data traffic created by the rapid adoption of Smartphones such as Apple’s iPhone and the growing number of tablet devices. Presentations were liberally laced with diagrams charting the progress of telecoms from the fixed wire ‘POTS’ era through mobile voice and SMS to the Telecom 3.0 mobile broadband future we are now entering.
The slew of new product announcements at MWC can’t have helped as engineers and managers at CSPs - particularly in emerging markets - contemplate the data usage implications of these devices. Forecasters are suggesting that the mobile data market will be worth US$10 trillion by 2020 – just 9 years’ time. Given the unprecedented growth rates of social networking services in particular - and how readily these services can be used over mobile devices - it is hard to disagree with even the most optimistic forecasts.
It is a big mistake to think - as many appear to - that explosive growth of mobile data will primarily take place in advanced markets, at least for the next few years. Just as most people in emerging markets leapfrogged the fixed wire era for basic voice services and now rely on mobile networks for this, so I believe many of them are now about to leapfrog the intermediate stages of mobile voice.
The reason I am so certain this will happen is because the driving force for this is not coming from the Service Providers or Vendors, but from consumers themselves. Emerging markets have on average significantly younger populations than advanced markets – a reflection of the relative states on a range of social issues such as healthcare and security. Young people are not bound by convention and readily adopt new technologies. Young populations in emerging markets are already aware of and see the potential of social networking and mobile data, as we have witnessed recently in Egypt and elsewhere.
As with all other telecom services the business models which will succeed in emerging markets will require a different approach to those in advanced economies. This is for the simple reason that you can’t deliver the same network infrastructure and services on APRU rates of sub US$5 as you can at plus US$15.
There are no silver bullet solutions. The differences will be at every level, from financing and company structure to every level of network infrastructure and devices. The main challenge now in emerging markets is to deliver mobile internet affordably, both to urban elites and to presently unconnected remote areas.