Mobile broadband subscribers increase by 850%

IDG News Service - The number of mobile broadband subscribers using 3G HSPA has increased by 850% worldwide in the past year, according to the GSM Association. But carriers are also running the risk of becoming a victim of their own success, according to some analysts.

HSPA (High-Speed Packet Access) is an advanced form of 3G deployed by cellular operators that use GSM (Global System for Mobile Communications) technology. Worldwide, GSM is the most widely-used cellular technology; it is used by AT&T Inc. and T-Mobile in the U.S. HSPA currently offers speeds ranging from 1.8Mbit/sec. to 7.2Mbit/sec.

There are now more than 32 million HSPA connections worldwide, compared with 3 million a year ago, according to the GSM Associaton.

"Operators have found a brand-new market connecting laptops to the Internet," said Mark Newman, chief research officer at Informa Telecoms and Media.

The level of interest has even taken operators by surprise.

"The growth has been bigger than we could ever have dreamed of," said Nicholas Högberg, chief commercial officer at Swedish mobile operator 3.

There are several reasons for mobile broadband's increased popularity. Lower pricing, improved ease of use and the convenience of being able to surf the Internet almost everywhere have played a role, according Newman and Högberg.

But with enormous success come new problems. For operators a big concern is capacity, both in mobile networks and backhaul -- the links that attach base stations to the rest of the world, according to Newman.

As the subscriber numbers increase, operators will have to upgrade networks, or users will see performance decrease and start to complain.

"So far, we have only seen a few isolated incidents. But we expect to see more of that this year," said Newman.

Carriers aren't turning a blind eye. But the question is whether they can upgrade networks before users start experiencing problems, he said.

"Of course it's a challenge, but my CTO says we have everything under control, and we have already handled the first wave," Högberg said.

Capacity demand will also force carriers to look at other ways of building mobile networks. It will also drive the demand for so-called femtocells, small base stations for the home that offload mobile network traffic by sending data via a fixed broadband connection.

"Sending data via base stations is a poor way of using capacity if a majority of users are sitting at home," said Newman.

The installed base of HSPA subscribers isn't the only area of growth. The number of networks and devices has also exploded.

The number of devices has increased by more than 265% since January of last year, according to the GSM Association.

Users can choose from about 467 USB modems, mobile handsets, notebook PCs, data cards and wireless routers, compared with 128 devices in January last year.

The number of networks currently supporting mobile broadband using HSPA is 166, in 73 countries. In May last year, the number of networks was 73, according to the GSM Association.

The growth on all fronts is creating a so-called virtuous circle in which mobile broadband is achieving greater economies of scale, driving down the cost of devices and attracting even more users, said Rob Conway, CEO of the GSM Association.