M2M could save mobile operators from nightmare scenario

Revenue streams in areas such as cloud, M2M and mobile financial services could save mobile network operators (MNOs) from a “nightmare” scenario, according to a report from Juniper Research.

While global operator-billed revenues will exceed $1 trillion annually by 2016, the report says MNOs face the prospect of a “nightmare” scenario under which operator costs will exceed revenues within four years unless remedial action is taken.

The report found that MNO core revenues were flat-lining and even declining in some markets, the result of market saturation allied to falling ARPU. Furthermore, operators were faced with the prospect of spiralling backhaul costs due to the dramatic increase in cellular network data traffic, which more than doubled in 2010 and is expected to increase by more than thirteen times to 25,000 petabyte per year by 2015.

However, the report argues that MNOs have the opportunity to redress the balance through adaptive strategies to optimise core revenue streams, develop new revenues and significantly reduce operating costs.

The Mobile Operator Business Models report highlights the need for MNOs to offer integrated rate plans, while providing a wide range of segmented prepaid and post-paid tariffs. It also emphasises the potential for double-sided revenue streams in areas such as cloud, M2M and mobile financial services where MNOs can leverage their existing assets.

“Clearly, there is no one-size-fits-all solution for MNOs, simply because the circumstances of individual operators differ widely, even within the same market,” said report author Windsor Holden.

“Instead, we have outlined a series of measures which MNOs can select according to their particular needs.”

Other findings from the report include: tier two MNOs with lower traffic volumes may gain competitive advantage by retaining flat rate data bundles; integrated mobile broadcast represents a potentially cost-effective means of offloading video traffic from the network; and as cost of fossil fuels increases, transition to green networks and base stations represents an environmental and economic imperative.

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