Operators in emerging markets feel network pressure

Growing demand for mobile broadband in emerging markets drives operators to expand their networks, but one industry observer calls for changes in existing business strategies to maintain their competitive edge.
Written by Liau Yun Qing, Contributor

Operators from emerging markets are boosting their mobile networks to handle growing traffic from smartphones and mobile broadband devices, but an industry observer says they should relook their current business strategies to stay relevant.

Arun Bansal, Ericsson head of Southeast Asia and Oceania, told ZDNet Asia that the region has seen an influx of smartphones and mobile data growth, driving operators expand their mobile networks in terms of coverage and capacity.

In a separate interview, David Chambers, Amdocs' product marketing manager, concurred that the growth of mobile broadband is putting a strain on operators' network.

However, despite the rush to boost their 3G infrastructure, Chambers said it is not technically possible for operators to build out capacity fast enough to meet forecasted demand.

He noted that these service providers are instead looking at Wi-Fi or femtocells to help offload data traffic, pointing to China Mobile's plans to deploy 1 million WiFi hotspots as an example.

Customer experience a differentiator
According to Chambers, customer experience will play a big role in boosting an operator's competitive edge. He explained that operators previously focused on selling the latest smartphones in the market because consumers' selection of a mobile operator was "90 percent based on the device and 10 percent on networks", he said.

This scenario will change, said Chambers, as users will increasingly choose their operator based on the quality of its networks. "Unless you are with the right network, [having the phone is] less useful," he added.

He also pushed for operators to offer tiered data plans instead of unlimited data plans since they will need to ensure their networks can cater to loads that cannot be determined. Contrary to consumer belief that unlimited data plans are better, he said customers will appreciate charges that are "more directly related to what they think they should pay for" instead of paying a higher premium for unlimited data plans.

Instead of offering a general billing system, operators should also provide ways for customers to check in real-time how much data they are using, he said, noting that operators should cap customers' data traffic when they reach the data limit instead of abruptly cutting them off.

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