YOU ARE AT:Opinion2012 Predictions: An intro and view from RCR Wireless News

2012 Predictions: An intro and view from RCR Wireless News

2011 was a transitional year for the mobile space as consumers began to look at their wireless devices more as a connection to the Internet than as simply a phone. Sure, that foundation had been laid out over the previous years, but they all seemed to come together over the past 12 months to the delight to carrier’s and their bottom line, as well as to the consternation of those in charge of network quality.

Without a doubt, the increased demand being placed on mobile networks by smartphones and tablet devices has those in charge of infrastructure assets on their toes. Whether it was bolstering already deployed 3G networks with more sites, more efficient technologies or greater backhaul capabilities, or rushing to get 4G networks up and running, 2011 was a year of change for industry.

So, what will 2012 bring? Well a quick survey of the RCR Wireless News staff has us predicting a continued push into 4G and data services. This push is being led by carriers needing to find the most efficient means available to transport data services as well as marketing that has consumers now requesting 4G-enabled devices even if they are not really sure what that means.

With this continued rush into data, carriers will also have to figure out a balance to pricing models that are still stuck in the past. For year, carriers have touted the benefits LTE services will allow in providing differentiated pricing models to consumers, including data packages that can be shared across multiple devices. However, to this point carriers are sticking with pricing models developed for 3G services and have yet to make good on those pricing claims.

The device market is also expected to continue to expand in 2012 as consumer demand for smartphones and tablet devices grows. Smartphone pricing has already dropped to the $50 level and below for postpaid customers, with prepaid smartphone pricing having touched the $100 level. The next evolution will come with 4G-enabled devices that have also begun to drop in price to the detriment of the bottom line at some operators.

Internationally, smartphones are also gaining momentum thanks to the embedded Internet connectivity in those devices that for many users is their first chance to access the Web. While pricing is still a barrier for some, carriers are recognizing the benefits of offering these devices and will begin developing more attractive prepaid pricing models in order to attract consumers.

Further up the screen-size scale, tablet devices continue to attract the interest of consumers looking for a device to handle multiple activities. While wireless carriers were initially involved in the market by embedding mobile broadband capabilities compatible with cellular networks, consumers have shown that they would rather rely on Wi-Fi and the corresponding lower price points of devices. The tablet market will continue to expand, though the direct connection to the cellular world will have to wait until carriers can find ways to provide for more attractive pricing models.

As for network technologies, LTE seems to have wedged itself into the position as the de facto standard for 4G services around the world. Established carriers looking to broaden their network horizons will continue to rollout their LTE networks, though spectrum concerns could hamper growth in many areas in 2012.

International markets are also building towards spectrum auctions for much needed capacity improvements and network enhancements. Countries across Latin America and Europe have begun or are set to begin selling off spectrum resources designed to allow carrier to roll out 4G services, or to have the capacity needed to enhance current 3G offerings. This should lead to opportunities for infrastructure providers and tower companies that will be called upon to build out those networks.

In developing markets, enhancements to 3G-based technologies will continue to provide legs to legacy networks, providing some of the advantages of 4G, without the additional costs associated with rolling out a new network. A lot of that cost is connected to the need for increased backhaul capabilities in support of mobile broadband speeds, with a greater focus expected to be placed on fiber build outs that will allow carriers to scale their needs to demand.

Another technology expected to impact the infrastructure market is the increased use of Wi-Fi technology to offload data traffic from highly congested cellular networks. This move will also manifest itself with increased use of smaller cell networks like distributed antenna systems that will target high concentrations of data users and femtocells that will put the burden of backhaul onto consumers. Challenges to these models will be to figure out integration techniques that will make Wi-Fi offloading a seamless proposition, and for carriers to figure out pricing models to encourage consumers to use femtocells.

Over the next couple of weeks, RCR Wireless News will publish 2012 predictions from a collection of industry analysts and executives to give you a broader understanding and insight into what the next 12 months could hold in store for the mobile space.

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