Telecoms spending billions to meet mobile broadband demand
May 11, 2009
The Apple iPhone may be giving AT&T a ton of new customers, but industry analysts question if the additional resources AT&T needs to deploy to support iPhone users are worth the cost.
An analysis of wireless network use in the middle of the day by Alcatel-Lucent found that web browsing was consuming 32 percent of data-related airtime but 69 percent of bandwidth, the Wall Street Journal reported.
As the proportion of customers with iPhones rises, so will the amount of bandwidth these customers use downloading videos and browsing the internet. AT&T will need to add capacity to its network as a result, the Journal reported.
Other telecommunications carriers such as Verizon Wireless will be competing for customers on the basis of speed and price, forcing the companies to invest billions of dollars in new infrastructure.
Over the next five years, telecoms will spend $50 billion annually on wireless infrastructure with the majority spent on 3G networks to support smartphones like the iPhone, according to an article by Godfrey Chua, research manager of wireless and mobile infrastructure at IDC.
This should be good for the consumer who wants faster data access, but companies may be forced to raise prices for mobile broadband or introduce limits on bandwidth use.
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