France’s Fourth 3G Mobile License: Data Traffic Growth vs Service Quality?

Marc Lippe, Director, Worldwide Field and Corporate Marketing, InfoVista

French cable operator Numericable and Virgin Mobile France recently announced they won’t be bidding for France’s fourth 3G mobile license, a move that will probably leave Internet provider Iliad Free as the only candidate.

In any case, grabbing the fourth mobile license will be challenging, even beyond having to prove the investment for the project, which can account for more than 243 million euros. The new entrant will face a market saturated with well established positions. Typically, we can expect the successful candidate to exercise a particularly aggressive pricing policy in its race for the subscriber.

But providing next generation mobile data services at a low price can make the task quite daunting. Why? Because that implies taking on a “tsunami” of data traffic growth even bigger than the 400 percent to 800 percent growth experienced by the industry in the last few years. And being a new player on the block comes with its own expectations over service quality.

Keeping mobile customers happy is not just about maintaining price at the lowest possible level. As more and more mobile and multimedia applications become available, mobile end-users will expect to experience the same quality on their mobile phone as on their PC when they access similar applications at home via their high speed internet connection provided by their ISP. As the new entrant is likely to expect deriving most, if not all, of its revenue growth from next generation mobile data services, it will have to ensure optimum quality, which may be put at risk as traffic expansion continues to stress the network infrastructure.

So how can a provider strike the fine balance between managing the data traffic explosion in a cost effective fashion and ensuring superior service quality at the same time? And, furthermore, how can it do it while taking all aspects of the network infrastructure (mobile and IP transmission) into consideration? Throwing in too much hardware and over-sizing the infrastructure may help ensure service quality but will defeat the purpose of keeping competitive costs. And cutting the network infrastructure will compromise service quality and lead to customer churn even as they just start to sign up for the services.

This fine two-way calibration of the mobile network to support cost effective mobile data services is an iterative activity—an activity to repetitively baseline service usage and quality as well as adapt the network capacity for near and long-term traffic growth. Striking this two-way balance requires specialized tools that can provide a holistic understanding of services and the resources supporting their delivery, as well as a comprehensive view into end-user experience. And such a tool would need to be put in place in advance to realize business goals—not as an afterthought.