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Weak Growth In Mobile-Data Traffic Dampens Need For LTE

LONDON, UKAccording to recent research, mobile-network operators can easily meet network demands at the current growth rates without a huge investment in Long Term Evolution (LTE). They could even emerge from the initial phase of market growth with substantially improved revenue-per-byte rates and much healthier margins. In fact, global telecommunications, media, and technology adviser Analysys Mason states that measured mobile-datatraffic growth in Europe is nothing like as fast as doubling every year, a frequently reiterated claim. While European mobile data traffic grew by 110 percent in 2009, it will grow by about 35 percent in 2010. And there is no real prospect of a pick-up in growth rates in 2011.

"There is a lot of exaggerated talk about mobile operators facing massively increasing pressure on their networks and having to use every resource possible to make costs, revenue, and traffic growth align. The problem with the view that there is a huge impending wave of mobile data is that it does not correlate to measured traffic on mobile networks," says Rupert Wood, Principal Analyst at Analysys Mason.

According to Wood, what is missing is an accurate sense of the relative size and dynamics of different types of mobile-data traffic. Mobile broadband traffic generated by PCs is by far the largest partaccounting for over 90 percent of traffic. But it is also the part with the slowest growth.

The other misunderstood area is the proportion of smart-phone-generated data that flows over cellular networks, which claims Wood, is probably as little as 10 to 20 percent in countries where most households have a fixed broadband connection.

Mobile operators stand to benefit from these trends. As long as they derive more money per byte from handset data than from PC data, they will get an improving mix of a low- and high-value datawithout placing damaging capacity pressure on their networks. The short-term danger they face is that they will not be able to hold on to that price premium. The longer-term danger is over-investment in LTE before the demand is there claims Wood. For further information, visit

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