Network operators could face 7-fold increase in data delivery costs

In a new study by research firm Juniper Research (Hampshire, England), it was reported that mobile network operators (MNOs) must explore means of addressing data delivery costs and inefficiencies in base station operations if their networks are to remain economically viable. According to the report, even with the increased deployment and utilization of LTE networks, global MNO data delivery costs could surpass $370 billion annually by 2016, a seven fold increase on their 2010 level of $53 billion.


In a new study by research firm Juniper Research (Hampshire, England), it was reported that mobile network operators (MNOs) must explore means of addressing data delivery costs and inefficiencies in base station operations if their networks are to remain economically viable. According to the report, even with the increased deployment and utilization of LTE networks, global MNO data delivery costs could surpass $370 billion annually by 2016, a seven fold increase on their 2010 level of $53 billion.

However, the report argued that future operating costs could be significantly reduced by the deployment of data offload solutions, such as WiFi networks and femtocells, allied to the utilization of network optimization techniques to facilitate flow control.

The Mobile Operator Business Models report observed the potential for savings at the base station level, identifying both active and passive network sharing as a means of reducing site lease costs and reducing energy loss by using feederless sites and remote radio heads. The report also recommended that operators in developing markets that are reliant on diesel to power off-grid generators should accelerate their transition to renewable alternatives.

According to report author, Windsor Holden, these measures will enable MNOs to meet their sustainability commitments.

“The case for reducing network inefficiency is both environmental and economic,” said Holden. “By implementing solutions designed to reduce energy wastage, not only will MNOs markedly cut their operating costs but they will following sustainable business practices which reduce greenhouse gas emissions.”

Other findings from the report include:

  • MNOs should consider leveraging core assets to develop new revenue streams in areas such as cloud platform provision and M2M
  • Tier 2 operators should continue to offer unlimited data plans to gain competitive advantage
  • Regulatory pricing controls will continue to negatively impact operator margins