Making a telephone call in London has become more difficult for early adopters of the new iPhone 4.

First of all the reception is rather poor. And it is not just that it is not showing the bars correctly; many users in congested mobile areas such as London receive the message ‘server not available’. (As a matter of fact, this doesn’t apply only to the iPhone—it is also experienced with other smart phones.)

The problem is that the current mobile infrastructure is buckling under the enormous increase in mobile data traffic. This is a crisis that is confronting many operators around the world and we have already seen network collapses in many places.

And it is not just people surfing the net or sending emails; the smart phones themselves are continuously ‘touching base’—M2M traffic—and this is contributing to the problem. Videoconferencing applications for mobile phones that Skype and Apple are promoting will further add to the problem.

On many occasions over the past decade we have referred to the absence of a proper mobile technology that is designed for data rather than for voice traffic. LTE and WiMAX technologies are needed to make the use of the network for data purposes more efficient.

The difficulty is that there are no short-term solutions here. It will be years before new technologies are developed and introduced, and make any real impact.

At the same time there is the spectrum issue and it will be a few years before more spectrum is available also.

So in the meantime expect more problems and inconvenience:

&bulls; Congestion problems such as no connections, drop-outs and poor quality
&bulls; The need for two phones—a smart phone plus a cheap mobile phone to make calls
&bulls; Relatively high prices as a means of limiting use of the network.

Mobile operators will face a double whammy:

&bulls; The need for ongoing investments in order to prevent a collapse of their network
&bulls; Relentless competition on an infrastructure level that, at best, keeps ARPUs where they are.

Cost-cutting is a key issue and in Australia we already see a great eagerness from the mobile operators to use the NBN for their backbone needs. On the other side, there will be a need to restructure the mobile infrastructure business, most likely along structurally separated lines, with a focus on utilities-based infrastructure investments.