Power consumption will change mobile broadband strategy

December 6, 2006

Mobile operators will soon have a bitter pill to swallow when the conflicting needs of power consumption reduction and mobile broadband network deployments collide. Power consumption is one of the top three network operating expenses for carriers and should be at the core of their technology choices for mobile broadband. Carriers are putting significant investment into rolling out 3G networks, and will continue to do so as these networks evolve toward 4G over the next several years. However, a new study by ABI Research indicates that cellular technologies used in isolation might not be the best route for maximizing margins. Instead, WiMAX or Metropolitan Wi-Fi could offer a way out of the dilemma.

Principal analyst Stuart Carlaw explains: "As soon as data consumption reaches between two and three times today's levels, a tipping point is reached, at which cell shrinkage and capacity degradation for WCDMA and CDMA2000 networks mean that carriers will need to install extra network elements that support the subscriber base, at considerable expense." He adds that, "More importantly, the power consumption required to support these upgrades will destroy any potential benefit carriers see from data revenues."

The study found that from a conceptual perspective - such mixed networks are still in their infancy - the best way to support mobile broadband will be to integrate current cellular offerings with targeted WiMAX and Metro Wi-Fi deployments in dense high traffic areas.

Such mixed networks could deliver significant savings. ABI Research forecasts that in terms of power consumption OPEX, by 2011 the cost of delivering wireless services to WCDMA customers will be near $14 per annum, while Metro Wi-Fi will be as low as just over $1.

Some wireless operators are already laying the groundwork for these developments. Sprint has nominated WiMAX as its 4G technology of choice, while T-Mobile is moving toward integration of its Wi-Fi hotspot and cellular networks. Others, such as Vodafone, with businesses based solely on cellular, may find themselves at a real disadvantage unless they act fast to consider other technologies.