Home  › Media › Mobile
mobile-world-congress-2013

Mobile World Congress: Network Operators and Vendors Rethink Roles as Traffic Explodes

  |  February 27, 2013   |  Comments

Wireless carriers have certainly grown accustomed to their perch from above, controlling so much of the industry and their relationships with customers. Only recently have they begun singing a different tune, as was evident here at Mobile World Congress this week.

Wireless carriers have certainly grown accustomed to their perch from above, controlling so much of the industry and their relationships with customers. Only recently have they begun singing a different tune, as was evident here at Mobile World Congress this week.

The astronomical growth rates of mobile broadband might appear to present a great future ahead for carriers, but with data usage exploding and traditional telecommunications services being disrupted by nimble startups with no legacy costs, more growth in mobile will mean more problems and tighter margins for many network operators.

Mobile broadband is projected to grow from 1.6 billion connections in 2012 to 5.1 billion connections in 2017, representing a compound annual growth rate of 26 percent, says GSMA chief marketing officer, Michael O'Hara, citing the organization's latest data.

"Networks are vital resources for the future," says Rene Obermann, chairman and chief executive of Deutsche Telekom, but as traffic across the carrier's networks increases 70 percent year-over-year, he adds that carriers also need to do more with less. Managing all that traffic will be a growing challenge, but Obermann says he is equally troubled by what he calls the "over-the-top paradigm." Apps like Skype and WhatsApp are cutting away at the revenue carriers have enjoyed for many years from services like text messaging.

"I'm not moaning, I'm just describing the reality and we need to deal with it... It means you invest, we take the profit, from there side," he says. "As a result, you see the stock market responding to all the telcos."

"It's not sustainable that networks make all the investments," adds Obermann. "The good news -- we are changing, we are becoming more efficient, we understand how to innovate, at least better than in the past."

"Telcos have to be smarter than they are today... They have to embrace innovation," he continues. "We have to view ourselves as enablers" and make cooperation part of carriers' DNA."

Hans Vestberg, chief executive of the infrastructure giant Ericsson, carried Obermann's theme into his follow-up keynote as well. By 2018, 92 percent of the earth's population will have access to mobile broadband, he says.

"The pace of change we're seeing so far in our industry is the slowest so far -- it's only going to increase from here," adds Vestberg. "It's going to transform us, you and me using the network, it's going to change businesses and it's going to change our society."

Although Ericsson is one of the direct beneficiaries of carriers' massive capital investments in network buildouts and technology upgrades, Vestberg says infrastructure vendors also need to innovate to create more value and efficiencies for their carrier partners.

While carriers have long bemoaned the notion of being nothing more than "dumb pipes," they desperately need to rethink their future roles to avoid such widespread commoditization. The ideas are finally bubbling to the surface, but as Obermann says, "it does require a big cultural shift in traditional telecommunications companies."

 

ClickZ Live Toronto Twitter Canada MD Kirstine Stewart to Keynote Toronto
ClickZ Live Toronto (May 14-16) is a new event addressing the rapidly changing landscape that digital marketers face. The agenda focuses on customer engagement and attaining maximum ROI through online marketing efforts across paid, owned & earned media. Register now and save!

ABOUT THE AUTHOR

Matt Kapko

Matt Kapko has been writing about mobile since 2006, before it became cool. Based in Long Beach, CA, he has covered mobile entertainment, digital media, marketing, and advertising for several business media outlets. A former editor and reporter for RCR Wireless News, paidContent, and iMedia Connection, Matt is a regular freelance reporter for ClickZ. You can follow Matt on Twitter at @MattKapko or drop him a line at matt@kapko.co.

COMMENTSCommenting policy

comments powered by Disqus

Get ClickZ Media newsletters delivered right to your inbox. Subscribe today!

COMMENTS

UPCOMING EVENTS

Featured White Papers

ion Interactive Marketing Apps for Landing Pages White Paper

Marketing Apps for Landing Pages White Paper
Marketing apps can elevate a formulaic landing page into a highly interactive user experience. Learn how to turn your static content into exciting marketing apps.

eMarketer: Redefining Mobile-Only Users: Millions Selectively Avoid the Desktop

Redefining 'Mobile-Only' Users: Millions Selectively Avoid the Desktop
A new breed of selective mobile-only consumers has emerged. What are the demos of these users and how and where can marketers reach them?

Jobs

    • Contact Center Professional
      Contact Center Professional (TCC: The Contact Center) - Hunt ValleyLooking to join a workforce that prides themselves on being routine and keeping...
    • Recruitment and Team Building Ambassador
      Recruitment and Team Building Ambassador (Agora Inc.) - BaltimoreAgora, www.agora-inc.com, continues to expand! In order to meet the needs of our...
    • Design and Publishing Specialist
      Design and Publishing Specialist (Bonner and Partners) - BaltimoreIf you’re a hungry self-starter, creative, organized and have an extreme...