KUALA LUMPUR--For mobile broadband players to succeed, they must avoid the mistakes made by their fixed service counterparts in their early years of broadband deployment, said an industry analyst.
Nitin Bhat, senior vice president of ICT practice, said at a C-level panel session at the Frost & Sullivan Mobile Broadband Summit here Tuesday, that as mobile broadband operators grapple with the phenomenal growth of their networks, they must also manage the escalating costs that come with running their networks.
He explained that when fixed broadband players first launched their services, they designed tariffs based on an "all-you-can-eat" flat-charge model. While this was successful in causing an increase in subscriber take up and generated growth in network traffic, he noted the model also indirectly caused the cost of running the network to escalate exponentially.
"Today, some mobile broadband networks in the region are at the stage where video and peer-to-peer (P2P) dominate their usage," Bhat told ZDNet Asia on the sidelines of the summit.
"But as subscribers become more savvy and send more traffic through the mobile broadband network, as they did with fixed broadband networks, mobile broadband operators will find it hard to derive commensurate revenues to offset the higher costs of running their networks."
According to Bhat, these costs include those incurred by the expansion of backhaul and transport networks, core network upgrades and IP transit charges. He suggested the whole industry get together to address some of these issues collectively.
"One definite issue that operators can address is the sharing of common infrastructure between players, either passively or actively. Passively, by way of tower and site sharing, while actively through the sharing of a common backhaul fiber-based network," he said.
To mitigate the rising operating costs, the Frost & Sullivan analyst also suggested that mobile operators design different tariff plans for peak usage in order to control subscribers' usage patterns. This, he added, would help operators design network capacity correctly and avoid over provisioning, which can escalate operating costs.
Other methods operators could explore to save costs include working with mobile virtual network operators (MVNOs) to address the needs of specific segments or to create applications for a specific segment of the market aimed at shoring up their revenue, Bhat added.
Don Price, group chief technology officer of Axiata Group, concurred, noting that the cost of operating a mobile broadband network is the biggest challenge in the companies that he overlooks. Axiata is a regional mobile player with 89 million subscribers and operates in more than five countries in Asia.
"Operators should stick to their core competencies and do what they do best," Price said during the panel session. "We need to manage our quality of service and subscriber identity better, and improve device management in order that we may optimize our networks and save costs."
John Stefanac, president of Qualcomm for South East Asia and Asia Pacific, and a co-panellist at the event, said: "Operators shouldn't be afraid of building a good partnership with MVNOs. By doing so, they can offer end-to-end solutions--including mobile applications--which can boost their revenue and offset the costs of operating their networks."
Edwin Yapp is a freelance IT writer based in Malaysia.