Growing strain on telco operators’ networks is a big issue

Dubai:

With telecom operators moving to a data-centric world, can they cope with the growing demand for online video content with the current capacity?

Voice revenues of the telcom operators are falling every year and, at the same time, the revenues from data are growing.

“The current capacity is never enough and the investment never stops. We will be upgrading all the time. The downloading of video content is growing day by day and the telecom operators around the world are aware of that. That is why they are investing heavily on infrastructure every year,” Ross Cormack, Chief Executive Officer of Nawras, told Gulf News.

He said that when 3G was launched three years ago in Oman, we were dealing with gigabytes but now we are dealing with terabytes. Right now telcos are able to “cope with the demand and I hope same in the future,” he said.

Concerns about the sustainability of the internet are not something new. Telcos can “meet these challenges posed by the new demands. It has shown that these challenges have met in developing countries with new business models, technology and investment.”

Telco operators have been able to meet every spike in demand with new investment and innovation so far, but what about tomorrow.

“I don’t think the operators have planned out a strategy very well. It would take around two to three years before a strategy management to be in place. They are now listening to ideas and nothing more.

I don’t think LTE is a solution to the problem. LTE will facilitate more content consumption,” said Ismail Patel, GCC research analyst for broadband and wireless at Informa Telecoms and Media.

He said what they need is a real strategy and no one knows what the strategy is.

If the operators bring the prices of broadband further down, then the operators are going to see further rise in content usage and put more stress on the networks. “That is what the operators are facing right now. If they increase the prices the operators are going to cause a downturn in data usage. One day they need to find a solution for this. It will be interesting to see in the next two to three years,” Patel said.

There are strategies emerging from developing markets and regional operators are looking to other markets for solutions. But nothing is concrete.

“Broadband has become part of our daily life and the Saudi market is expected to grow by eight per cent by 2015. The infrastructure will be an ongoing process by the telcos around the world and increase the broadband speeds and offer different packages. There is still room for improvement,” said Sacha Dudler, advisor group CEO, STC, Saudi Arabia.

Google is witnessing a huge growth of online video in the region driving the need for widespread faster broadband.

The operators are complaining that Google and others are not paying them anything for using their network and causing big strain on their networks.

“The growing strain on the networks is a big issue for the telco operators. One option is to move from unlimited packages to limited packages with different data packages, so people will limit their usage. Another option is to increase the prices of data packages,” said Matthew Reed, principal analyst Informa Telecoms and Media.

It is an ongoing process, he said and added that they need to invest in new capacity and pricing of packages. From the operators’ point of view, they say that they are not getting the return and benefit on investment.

“They can form partnerships like Nawras did with WhatsApp and Mobily forming a tie-up for a special package with Google,” he said.