In recent weeks, Hong Kong government's new Fair Usage Policy (FUP) guidelines for protecting consumer interests in relation to unlimited mobile data packages have led mobile industry participants to once again re-examine whether networks will ever be able to keep pace with the explosion of data use engendered by iPad3 and its ilk. One thing is becoming clear in the context of the dreaded next economic slump - to address this insatiable demand for bandwidth, operators will need to rethink the dated "rip and replace" or build expensive overlay network strategies and opt for more intelligent evolutionary models.
Given the fierce competition, mobile operators face intense pressure to continue to offer unlimited data plans, fearing backlash of the type that was experienced in the United States. As we have seen in fixed-line broadband services, changing an unlimited offer is often met with tremendous resistance. Altering consumer behaviour and expectations is difficult if not impossible in the short term.
A simplistic logic has prevailed until now - upgrade or erect more base stations, and the problem will go away. This conveniently forgets that the bigger issue is how to augment the core network to handle the tower backhaul portion of the demand.
Innovation is the key
There is no doubt in my mind that the solution will come out of technological innovation. Considerable resources are being dedicated worldwide to addressing this very issue.
The process, currently underway, of upgrading existing 2G and 3G base-stations to LTE capable ones on the radio access portions of the network, will help create additional capacity to satisfy the over-the-air bandwidth demand. Until these base stations become operational, interim solutions like femtocells and increased wi-fi support are needed.
However, radio access portion of the network is only one dimension of the problem. The bigger issue is that of how the operator's backhaul and core network portions will cope with increased traffic since many of the connections to towers were designed for primarily voice-only traffic, not 4G LTE smartphones.
Technical solutions exist that render it unnecessary to physically lay new cables. For backhaul, Carrier Ethernet enables operators to interface multiple wireless base-stations over a single, high-capacity connection to the core network. For core networks, innovations like Coherent optical transport can create a ten-fold increase in available capacity over existing networks, resulting in significant overall cost reduction for the operator.
These innovations can allow operators to easily scale up their networks to address bandwidth demands expected while maintaining service quality, and equally importantly - lower the overall cost for bandwidth.
The problem of data overload need not stall the growth of Hong Kong's mobile industry, or hinder its consumers from participating fully in the mobile data revolution. The technology exists today to improve the capacity and performance of existing networks - and operators need to act now.
Anthony McLachlan is vice president and general manager, Asia Pacific, Ciena Corporation
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