While 3G operators have been reporting annual increases of 300 to 700% in 3G data traffic volumes, they have not needed to be unduly concerned because volumes have increased from very low levels. However, a new report published today by Unwired Insight, entitled ‘Will 3G Networks Cope?’, shows that 3G traffic volumes will continue to increase significantly, and some HSPA networks will have capacity shortfalls by the middle of 2010.

Since 2007, 3G networks worldwide have experienced substantial traffic growth, as some 2/2.5G customers have moved to 3G services and mobile broadband services have emerged. According to the new report, this is just the beginning. Surplus HSPA capacity will soon be occupied, with continued take-up of mobile broadband services and the migration of most 2/2.5G users to 3G services within five years.

Mobile broadband services are already having a profound impact on 3G networks, and yet mobile broadband penetration is still lower than 10% in most countries,” according to report co-author Dr Mark Heath. Such services are extremely network-intensive. “A mobile broadband customer using 1GB per month consumes the equivalent network capacity of over 7000 minutes of voice telephony,” adds Heath. Currently, the majority of mobile users are still supported by 2G networks. “Within the next five years, the vast majority of 2G customers will migrate to 3G services, substantially increasing traffic volumes,” warns Heath.

Some of the key findings of the new report are:

• In the five year period to the end of 2014, 3G traffic volumes in developed markets will increase by more than 20 times. Drivers for these rises include increasing 3G penetration, continued adoption of mobile broadband services, escalating penetration of smartphones, proliferation of flat-rate service bundles and increasing usage of 3G devices indoors.
• There are significant differences in the outlook for different types of 3G operator. Some incumbent 3G operators with large customer bases will face HSPA capacity shortfalls in mid-2010, or even earlier if customers migrate rapidly from 2/2.5G to 3G services.
• In contrast, new-entrant 3G operators will not suffer from severe short-term limitations of HSPA capacity, and will have a two-year window of opportunity to aggressively promote mobile broadband services.

The report warns 3G operators that they need to take action now, before it is too late.

According to co-author Dr Alastair Brydon, “The effect of 3G network capacity shortfalls will be that service users experience degradation in the quality of service provided by a 3G operator, particularly at times and locations at which the network is heavily used.” He adds, “This is likely to cause serious dissatisfaction among users.”

The report discusses the actions that operators can take to delay HSPA capacity problems, such as tariff changes and fair usage policies, slowed migration of 2/2.5G users to 3G services and deployment of femtocells.

The new report ‘Will 3G Networks Cope?’ published by Unwired Insight addresses one of the biggest concerns within the mobile industry, as to whether 3G networks will be able to cope with future increases in 3G traffic volumes.

The report gets to grips with this critical issue by quantifying how 3G network capacity and 3G traffic will evolve over the next five years. The report contains 120 pages, 29 figures, 18 tables and 30 000 words. For more information, or to buy the report, email contact@unwiredinsight.com or telephone +44 (0) 1480 819391. Dr Alastair Brydon and Dr Mark Heath are authors of more than 40 reports on key issues in the mobile industry.

A free whitepaper associated with the report is available to download from the Unwired Insight website.