The Impact of Wireless Network Congestion: Losing Customers and Revenues

Carriers are becoming increasingly plagued by network bandwidth and signaling overload. This is nothing new, but the way that it is affecting carriers is changing – and getting worse. Up to this point, carriers have been able to invest in 4G networks and boost network capacity in hotspots, but these solutions are reaching their limit and carriers are starting to feel an impact on their revenues. 4G is also showing that it’s getting users to increase their data usage as reported recently on the Sprint network so in the long run, it might add to the congestion problem rather than help.

Perhaps one of the clearest examples of lost business due to network overload comes from Vodafone. In Australia, the company lost 375,000 customers in the first six months of 2011 and expects a loss of about $156.4 million for the period. While some of the decline was drawn from other factors, Vodafone acknowledged most of it was due to its network and customer service issues.

The impact of this network overload may have further implications as most carriers are being forced to abandon unlimited data plans, in favor of metered pricing. And even Sprint, the last remaining truly unlimited data provider, upped its prices by $10 earlier this year in order to maintain its unlimited offering.

And while one of the biggest drivers in the mobile data crunch, the iPhone, has managed to keep AT&T afloat despite customer complaints, with Verizon now offering the iPhone, and Sprint getting it later this year, AT&T will have its work cut out for it. In fact, according to ChangeWave’s latest mobile phone user survey, overall satisfaction is fairly equal between AT&T and Verizon iPhone users, but users report that AT&T drops far more calls on the iPhone than Verizon does. With Sprint’s unlimited plans, the iPhone battle is sure to heat up in the coming months.

We’ll have to stay tuned to see how that plays out among carriers, but with smartphone pricing expected to drop to $99 this holiday season, carriers are in for yet another wave of mobile data demands. Read this previous post to see SEVEN’s answer to the mobile data tsunami and let us know your thoughts on the changing wireless world in the comments below.

About SEVEN Networks

SEVEN Networks software solutions deliver device-centric mobile traffic management and analytics for wireless carriers. Extending control from the network to the mobile client gives operators the power to manage and optimize data traffic before it impacts the network. Device-based analytics offer deeper and timelier insight than solutions that are solely network based. SEVEN’s Open Channel products reduce operator costs, increase efficiency in the use of wireless infrastructure, and enhance end-user experience. They bring immediate capacity relief to overloaded networks, simplify the creation of innovative new service plans, and provide actionable intelligence for mobile carriers.
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One Response to The Impact of Wireless Network Congestion: Losing Customers and Revenues

  1. Pingback: An Open Letter to One Reel, and/or Bumbershoot, and/or CenturyLink | The SunBreak

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