Decoupling of revenues and traffic - Is there a revenue gap for mobile broadband?

Abstract

Mobile broadband is increasing rapidly both when it comes to traffic and the number of subscriptions. Operators are challenged by the fact that revenues from mobile broadband are de-coupled from the traffic. In this paper we will analyze if this de-coupling results in a “revenue gap” for the combined voice and mobile broadband business and, if this is the case, how significant the gap is. We analyze a country and operator case where the increasing user demand requires network upgrades. The impact of increasing traffic, revenues and costs is analyzed in terms of profit margin for the voice and mobile broadband businesses. The results show that the overall profit for the modeled operator decreases due to declining voice revenues. The contribution from mobile broadband depends heavily on the amount of traffic growth and prices.