Juniper Research, a leading market research firm via an analysis of 12 international operators found that annual mobile operator expenditures are now in excess of $800 billion, a figure that could potentially lead to expenditures growing bigger than revenues within the next 5 years. Juniper Research via its Mobile Operator Business Models: Challenges, Opportunities & Strategies 2014-2019 report also cautioned that a combination of flattening revenues allied to surging data traffic costs could ultimately threaten the viability of network operations.
According to Juniper Research, these mobile operators are seeing their margins falling by an average of 6.4% over a three year period, with a number of them experiencing costs increases of 1.5%-2% per annum. Juniper Research also found that the situation could become critical in a number of developing markets and suggested network optimization as a way to reduce network cost. In India for example, Juniper Research said that regional operators without network optimization "could see data costs outstrip data revenues by $45 billion within 3 years".
The report however argued that the case is slightly different in the US, where Verizon and AT&T have countered the sliding margins with the introduction of shared data plans, citing Verizon's increase of wireless revenues by more than 7% and AT&T netting 14 million households on shared plans.
Report Author, Dr Windsor Holden
Given the threat from OTT (Over The Top) VoIP and messaging services to core service revenue, the US emphasis on focusing the value on the data element is absolutely the right way to go. This is particularly true within an increasingly 4G environment.
