Mobile cloud services sustain revenue and growth in new LTE networks

By Stuart Benington, Director of Portfolio Strategy

As mobile operators invest heavily to migrate to LTE networks, they face a major financial challenge in the near-term. The number of LTE-based services — and the profits they bring in — will require a long-term horizon to achieve a return on investment (ROI).

To speed up their ROI, operators can support an LTE business model with revenues from other services using the same technologies and infrastructure. One of the most promising ways to do that is to satisfy the growing enterprise need for mobile cloud connectivity.

Enter the cloud

According to Big Data, a 2011 report by the McKinsey Global Institute, data volume worldwide is growing at a rate of 40%, year-over-year. At the same time, IT spending is growing by only about 5%.

This trend promotes adopting cloud services. It helps achieve the necessary compute and storage scale, while flexibly applying resources only where and when the enterprise needs it.

Connecting wirelessly to the cloud is an ideal way for enterprises to extend their access to the cloud. It makes the most of storage and compute consumption through expanded access and applications. It also improves ingestion—uploading “big data” into the cloud through mobile devices and machine-to-machine (M2M) connections.

The LTE network lends itself well to cloud connectivity because it:

  • provides high-bandwidth connections
  • is IP- and Ethernet-oriented, the technologies used to connect to the cloud and within data centers
  • offers tools that operators didn't have in 2G and 3G (such as more granular ability to manage traffic flows and a better, DPI-based view of traffic running on the network)
  • features low latency, which is vital to the small flows and sessions that characterise M2M communications.

The growing M2M market also presents huge opportunities for operators. Potential new services are as numerous and diverse as the industries using wireless M2M. These industries include agriculture, health care, construction, financial, retail, government, education and utilities.

A virtuous cycle of growth

The rise of both cloud services and LTE creates a virtuous cycle. Cloud services continue to grow, which helps operators sustain their LTE business model. That growth enables them to accelerate LTE investments. Then operators can support new types of enterprise services, including cloud-based applications.

To take full advantage of this opportunity, operators have to deploy the right backhaul infrastructure. In addition to IP awareness and content awareness, the right backhaul network can leverage the technical advantages that LTE presents:

  • flattened architecture that helps distribute compute and storage resources
  • seamless migration from 2G and 3G for various physical mediums and networking protocols
  • an increase in capacity that starts to put mobile connectivity on par with fixed broadband access.
Find out more at the LTE Conference as part of Telecoms Tech World on 4-5 June
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