Operators optimistic despite the downturn

It's springtime--always the time of year when optimism reigns, and this week was no exception. In separate speeches Tuesday, both President Obama and Federal Reserve Chairman Ben Bernanke expressed tentative hopes [1] the economy is on the cusp of recovery, with the latter pointing to recent improvements in data on home and auto sales, home construction and consumer spending as the impetus for his more positive outlook. And after Nokia reported its narrowest quarterly profit in more than a decade on Thursday, the device giant's CEO Olli-Pekka Kallasvuo suggested the worst is now over [2], contending the reduced inventories maintained by retailers during the downturn would translate into stronger demand for Nokia products in the months ahead. Not only that, but investors agreed, with Kallasvuo's comments credited for sending Nokia shares more than 7 percent higher in European trading.

Carriers are still optimistic about the future of mobile data services as well. According to a recent study [3] of 228 wireless industry senior executives conducted by mobile web solutions provider Bytemobile in conjunction with the Economist Intelligence Unit, 84 percent of the total sample--and 92 percent of operators--said they believe subscriber demand for data will remain robust despite the downturn, noting that traffic over Tier-1 networks is growing at a rate of 10 percent to 15 percent per month. But respondents admit there are still obstacles to overcome, with 43 percent citing service costs as the most likely inhibitor of mobile data adoption and 36 pointing to the effects of limited bandwidth on the network. The introduction of unlimited data plans poses major problems: As many as 64 percent of the executives surveyed believe bandwidth is becoming increasingly limited for the content and services their subscribers are demanding, and 54 percent expect network capacity to remain tight over the next three years.

As a result, carriers are mulling proactive management of user behavior to solve potential capacity issues--roughly 56 percent of survey respondents cite variable bandwidth pricing as a viable solution to capacity challenges as well as a promising source of revenue. In addition, 29 percent of operators surveyed believe they must more creatively package and price mobile web access and mobile content, designing customized offers relevant to each user's interests and needs. Now that should be interesting to watch: There are many adjectives used to describe mobile operators, and "creative" is rarely one of them. But hey--it's springtime, the sun is shining, and it's not the time to rain on anyone's parade. -Jason [4]