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Boom for mobile masts? or collapse of mobile data?

There are two ways to interpret the latest survey from Informa. One is the way they've headlined it: "Mobile traffic boom to revive struggling base station market."

But the same survey could be pointing quite a different way; it could be warning us that the mobile data boom is going to be short-lived.

The forecast comes in two parts. First, that global mobile traffic from YouTube and other mobile video streaming applications will increase 5,514% by 2012. And at the same time, global mobile data revenues will only increase 77% from 2007 to 2012.

Quite logically, the conclusion is that "This will push current mobile network costs and architectures to the breaking point" says Mike Roberts, the author of the Mobile Networks Forecast.

His expected solution: the operators will invest in new capacity, and will use new technologies to increase that capacity: "The mobile traffic boom will also lead operators to increase investment in next-generation networks such as WiMAX and LTE, which can support higher traffic loads at lower cost compared to traditional systems. This will lead both WiMAX and LTE base station unit sales to overtake those of CDMA by 2012, as operators shift investment to next-generation systems."

That's a surprising conclusion, and conlficts with the private opinions of most leading participants in the mobile industry. They don't see mobile WiMAX ever becoming a factor in the established, capacity-hungry markets of Europe and North America. They feel the technology isn't suited for large built-up areas where most of the population lives and works.

The other problem is: where will the operators get the money to invest in this extra capacity?

Roberts analyses the pressures on operator finances starkly: with revenues unable to rise faster than his predicted 77% from 2007 to 2012, current mobile network costs and architectures will be pushed "to the breaking point, and will lead to everything from network sharing and spectrum refarming to the launch of femtocells and next-generation networks."

And, he points out: "The disconnect between soaring mobile data traffic and modestly increasing revenues helps to explain why operators will keep a lid on network investment in the short term. The mobile base station market will be flat for several years due to restrained operator investment in many regions and fierce price competition among vendors."

But while Roberts is undoubtedly correct in seeing an upgrade business for base station provision, he appears to be rejecting the alternate reality: that as capacity dries up, prices will rise. And this would, quite simply, restrict growth, without some kind of magic wand.

Growth at the moment may, in short, be illusory. Operators like Vodafone, especially in the UK, have done deals with backbone providers like BT to share the rollout of high-tech, fibre based next generation networks. But the capacity that provides isn't going to expand continuously; it will probably run out of steam.

According to one consultant, "Vodafone can expand mobile data for two to three years without difficulty in the UK. Its rivals, probably, won't be able to match that. And after that, growth may be difficult or even impossible."

Details of the report, Mobile Networks Forecasts, are posted on the informa web site.