More than two billion individuals around the globe will have become mobile phone subscribers by the end of 2005, and that number will jump to over three billion by 2009, analysts predict.
However, according to new data from Infonetics Research, mobile operators are "paying through the nose" to handle the so-called backhaul of voice, video and data traffic across their networks.
"Mobile operators spent $16bn on mobile backhaul link services in 2005, and will spend double that in 2009," said Michael Howard, principal analyst at Infonetics.
"Although this is a significant increase in charges, the good news is that they will be getting a lot more for their money in the coming years.
"The average annual charge per connection will go up only 18 per cent between 2005 and 2009 from $8,004 to $9,455, while the capacities will grow from one to two T1/E1s per connection to tens of megabits/sec to even 100Mbps."
The Infonetics report said that IP, Ethernet and next-generation microwave technologies are allowing carriers to provide new mobile backhaul options for mobile operators that should reduce capital and operation costs.
"New technology and product options are becoming available now, especially in next-generation microwave and IP/Ethernet products, where single products can efficiently handle 2G/3G voice simultaneously with 2.5G/3G/3.5G data and video traffic streams," said Howard.
"These improvements will allow mobile operators to slowly increase their capital investment while rapidly adding more subscribers and higher capacity services."
According to the report, worldwide sales of mobile cell site backhaul equipment hit $3.4bn in 2005, and will decline 39 per cent to $2.4bn in 2009.
The decline in revenue is due mainly to microwave equipment becoming significantly cheaper with much higher capacities.
Robert Jaques, vnunet.com
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