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What is the Future for Mobile Network Operators?

The telecommunication industry is continuing to resist structural changes, but the reality is that if they don’t transform, technology will do it for them. We have seen the fixed telecom operators slowly being pushed back into the infrastructure utility market.

Mobile networks are moving in that same direction—that is, the largest part of their network will be a utility, with currently two, three or four mobile infrastructure providers per country and little economic sense for overbuilding the basic infrastructure, the industry is facing serious problems.

The major use of mobile phones is in data (95%+) and the use of data will only increase. This means that in order to handle the capacity, the underlying backbone network needs to be fibre-based. Already most mobile base stations in cities are linked to fibre optic networks, with more and more connected to fibre year by year. 5G will only speed up that development as only a fibre network will be able to handle the increased broadband traffic.

Independent mobile tower operators are increasingly taking over more and more of these towers, as it doesn’t make economic sense for every mobile operator to deploy its own towers and build its own fibre network to these towers.

With mobile towers closer and closer to the end users, there is an opportunity for the mobile operators to offer effective high-speed broadband competition with the fixed network operators.

Most fixed network connections are still based on the copper network, and this creates an opportunity for mobile operators with deep fibre networks and, for example, a last mile 5G connection.

The next step for the fixed operators will be to decide how to proceed beyond the copper or the HFC networks. Fibre-to-the-home and fibre-to-the-curb are the most likely options here, and 5G is certainly one of the options to drive proper high-speed broadband into people’s homes.

So a convergence is taking place. Increasingly the backbone networks for the mobile operators will mimic the fixed ones, and there will be little room for duplication of these networks. So wireless will increasingly be a retail element rather than a basic network.

These changes are already reflected in the evaluation of some of the mobile network operators (MNOs) and mobile tower operators. Those of the MNOs are going down while those of the tower operators are going up. This is a clear indication of where the financial market sees the market moving to.

So, rather than resisting change, the MNOs should take a leadership role in the transformation of the industry. Especially with the inevitable changes that are going to occur in the fixed network. A holistic approach will be needed instead of one that is aimed at protecting a sharp divide between mobile and fixed networks.

By Paul Budde, Managing Director of Paul Budde Communication

Paul is also a contributor of the Paul Budde Communication blog located here.

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Wireless is merely access to wireline Michael Elling  –  May 13, 2018 11:32 PM

One should never have considered wireless to be separate from wireline.  The law of wireless gravity holds that that a wireless bit will seek out fiber as quickly and cheaply as possible.  The future will be found in horizontally scaled het-net business models with extreme edge densification.  Say goodbye to vertical silos; they’re simply not sustainable.

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