Major cities face ‘network gridlock’ without significant mobile infrastructure investment

Expenditure must triple, GSMA warns, as demand for mobile data across ‘megacities’ is expected to rise 50% by 2025

Major cities must encourage mobile operators to boost infrastructure spending to meet exploding demand for mobile data or face network gridlock'.

That's according to a report by GSMA and Boston Consulting Group, entitled Delivering the Digital Revolution', coinciding with the 2018 Mobile World Congress (MWC). It assessed the ability for mobile networks to meet growing demand for data in the world's largest cities, including Tokyo, New York, Mumbai and London among others.

With demand expected to rise by more than 50% in major cities by 2025, in part due to the rollout of 5G and the continued expansion of the Internet of Things (IoT), the report warns networks in megacities' face a significant gap between data demand and network capacity.

Focusing predominately on major urban areas, a projected 48% of traffic demand is expected to go unserved by 2025 unless changes to regulatory frameworks and policies are made to encourage greater infrastructure spending.

John Giusti, GSMA chief regulatory officer, said: "The current global regulatory landscape has been successful in creating a competitive market that has made mobile connectivity accessible to more than five billion people around the world.

"However, unless government policies encourage investment, the network capacity required to satisfy future demand is unlikely to be achieved.

"This will result in a bad deal for consumers and businesses, particularly those in our most populous cities, and is likely to have a direct impact on these economies.

"Measures such as making affordable spectrum available and relaxing planning restrictions on small cells can help foster an environment that enables operators to build mobile networks ready for the future."

The GSMA argues while current policy has encouraged competition and low prices in most markets, regulations today either inhibit investment or slow approvals, adding cost to the deployment of new infrastructure technology.

Under current conditions deployment of infrastructure will be very financially challenging, with operation expenditure and capital expenditure relative to sales expected to double between 2017-2019 and 2020-2025.

Moreover, mobile operators' capital and operational expenditures in cities would need to triple to sufficiently provide network capacity a level GSMA describes as "simply not sustainable under current conditions."

Rising demand for mobile data is underlined by research by StatCounter that showed mobile devices accounted for the majority of internet usage for the first time in October 2016, at 51.3%, overtaking desktops at 48.7%.

Meanwhile, telecom giant Vodafone recently announced a trial using 4G and IoT technology embedded in an air traffic control drone tracking and safety system to track and control drones which could present a risk to aircraft.

New technologies such as Vodafone's trial, coupled with the gradual rollout of 5G which Intel has earmarking latter 2019 as the date the first 5G-enabled laptops will hit the market lending credence to the GSMA's stark warning that demand is set to outpace network capacity.

"Reforming regulation to reflect changing market and technology realities is a long and complex process, but it is vitally important to ensure our networks continue to deliver the best possible experience for subscribers," Giusti added.

"Reaching compromise and balancing the needs of regulators and operators is critical to building the networks of the future and unlocking the economic and social benefits that access to mobile provides.

"All stakeholders must work together to ensure the timely and affordable deployment of new technologies necessary to delivering the next stage of our digital transformation journey."

Image credit: Bigstock

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