Survey: Wireless networks are near capacity

More than one-third of base stations in North America face capacity constraints, Credit Suisse said

By , IDG News Service |  Networking

Mobile networks in North America are filled to 80 percent of capacity, with 36 percent of base stations facing capacity constraints, according to a survey by investment bank Credit Suisse.

Networks in other regions also are more than 50 percent utilized, with the global average at 65 percent, Credit Suisse said after surveying carriers around the world. That level of use matches the average "threshold" rate that would trigger the service providers to start buying more network equipment, the report said. Looking ahead, on average the carriers expected their utilization rate to grow to 70 percent within 12 months.

Credit Suisse used the results to predict new sales by makers of cellular equipment, such as Ericsson, Alcatel-Lucent, Nokia Siemens Networks and Huawei Technologies. But at a certain level, heavy use of a base station can also affect the mobile experience of individual subscribers. The survey found that 23 percent of base stations worldwide had capacity constraints (defined as a utilization rate over 80 percent during busy hours), while 36 percent in North America were under that kind of pressure.

The North American networks were 72 percent utilized two years ago. The region's carriers expect the rate to ease back down to that point within two years. North American service providers are likely to buy more equipment soon, because having their networks 74 percent filled is the threshold rate in that region, the survey said.

Asia's mobile networks are also getting more filled, rising from 54 percent utilization two years ago to 62 percent in 2011. But Western European networks are getting less constrained, falling from 66 percent to 56 percent. Both regions will be well over 60 percent within two years, however. Latin America's mobile networks will hit 85 percent average utilization within a year, according to the survey.

Data services are driving the growth in network usage and in turn account for most of the growth in average revenue per user to the carriers. Credit Suisse forecast worldwide data revenue to grow by 11.7 percent this year while voice revenue falls 4.4 percent and SMS (Short Message Service) revenue declines 3.3 percent. Last year, average data revenue per user increased 25.6 percent.

Mobile operators' capital expenditures are expected to grow 10 percent this year, despite downward pressure on prices for the pieces of equipment they are buying. Capital spending is likely to increase everywhere but in Western Europe, the survey showed. The largest share of that will be spent on radio-access network equipment, rather than back-end infrastructure.

Join us:
Facebook

Twitter

Pinterest

Tumblr

LinkedIn

Google+

NetworkingWhite Papers & Webcasts

See more White Papers | Webcasts

Answers - Powered by ITworld

ITworld Answers helps you solve problems and share expertise. Ask a question or take a crack at answering the new questions below.

Join us:
Facebook

Twitter

Pinterest

Tumblr

LinkedIn

Google+

Ask a Question