From the telecom carrier perspective, Part 2

Monday, January 25th, 2010 Marcio Avillez, VP Network Offerings

As I discussed yesterday, the mobile carriers’ have a new bottleneck at the landline network, rather than the radio network.

The fact that most carriers are going to be playing catch up over the next few years is likely to, among other things, make them rethink the way they sell mobile internet services. We are already hearing many rumblings from providers that that very few users are driving the vast majority of the traffic growth which also implies that most users are paying for way more than they consume, in order to keep the carriers profitable.

One impact to the enterprise is that over time, the price plans form these carriers – which today are at least predictable, if still relatively expensive – are likely to become less predictable over time, as carriers roll out usage-based plans as a means to control and/or pay for their capital expenditures. Carriers may opt for per charging fees per Mbits of traffic or for structuring plans that include a certain number of Mbits/month with overages for usage above these thresholds (common today in the EU but not in the US).

The other impact to the enterprise is that they will likely need to know more than they know today regarding their user’s behaviors in order to position themselves better in future negotiations with carriers or in order to stem the tide of growing telecom expenditures being approved via the expense report process. If the enterprise wants to get ahead of this trend, it will become more important to be able to answer questions such as:

• where do my users use the service
• what applications are they using
• how many mbits per month are consumed

Being able to answer these questions is likely to put IT/Telecom managers in a better position to negotiate with carriers and/or devise effective strategies to control and better predict and/or budget for these costs.