Analysts need to polish their crystal balls

A news story from Reuters today states that mobile data revenue is expected to jump 23 percent this year thanks to increased usage of smartphones and tablets, as the number of global mobile connections reaches 5.6 billion this year.

Quoting research firm Gartner, it says that mobile data services revenue will total $314.7 billion this year, a 22.5 per cent increase from 2010, and added that, in four years, mobile data sales will reach $552 billion.

In another stroke of reporting genius, the article goes on to say that telecom operators have pinned high hopes on surging mobile data usage but have been slow to turn high demand into high revenue.

Quoting Jessica Ekholm, principal research analyst at Gartner, “data revenue will continue to grow but at a much slower rate. This is causing a decoupling between revenue and data traffic, and is creating an increase in network costs for carriers as they try to sustain growing data traffic.”

So tell us something new! We already know that “operators are struggling to manage capacity and pricing so that a few heavy users do not clog up networks and deny average downloaders reliable speeds, access and predictable bills.”

Not satisfied at reporting the ‘bleeding obvious’ that would have taken two phone calls to operators and a quick look at the TM Forum blog site to deduce, the experts go on to say that operators “do not want to be relegated to ‘dumb pipes’ or be stuck with the bill for network investment while services and application providers such as Google and Facebook reap the benefits.”

Give me strength!

In a final stroke of genius Sylvain Fabre, research director at Gartner, is quoted as saying, “what carriers need are innovative ways to increase data revenue while finding smart solutions to manage a growing demand in data.”

“Ultimately, it will be the consumer who chooses the content he or she wants to use, and carriers need to ensure the quality of experience is good. A sub-standard user experience may lead to higher churn.”

This is where The Insider took out the Swiss Army knife to slash both wrists. Luckily, there were so many attachments he could only manage to unfurl the corkscrew and had to resort to another bottle of local French wine to drown his sorrows!

Everyone is aware that a number of operators have ditched unlimited offers, instead offering capped data plans for dongles and fixed caps for smartphone users, but that will not resolve the continuing issue of falling margins. It would be OK if all operators in a market could simply change everyone to capped plans but surely, regulators would get very suspicious if they did.

Operators in most markets are frowned upon if they try and throttle the data abusers, ‘net neutrality’ rules are emerging and they still have to make heavy investment in infrastructure in order to keep providing the service levels their customer expect, without them necessarily paying for it.

Then, of course, are the competitive pressures from other operators keen to steal some market share, even at a loss. So please, all you analysts out there, don’t keep telling us what we already know – use some of those incredible insights into the future you possess, polish up those crystal balls, and tell us how we can avoid dropping margins, increased network traffic, increased investments, and still survive.