How SA operators can save 27% in infrastructure costs

Cisco says that a data offload to WiFi will provide the viable, most cost effective alternative for mobile operators in South Africa.

The technology group says mobile operators in South Africa can reduce HSPA and LTE infrastructure costs by roughly 27% or USD $972 million.

The Cisco Visual Networking Index (VNI) Forecast (2012-2017) projects that South Africa’s Internet protocol (IP) traffic will quadruple between 2012 and 2017 at a compound annual growth rate of 31%.

South Africa’s IP traffic (fixed and mobile) is expected to reach an annual run rate of 6.1 exabytes ― almost 6.55 billion gigabytes per year – by 2017.

According to CCS studies, this growth threatens to overload the capacity of regional mobile operators, who may be struggling to ensure availability of high-speed packet access (HSPA) and LTE spectrum.

“WiFi could hold the solution, transforming wireless Internet access by offering higher speeds, improved security, and more availability on almost any connected device,” it said.

Cisco Consulting Services calculated the cost reductions operators can expect between 2013 and 2017 under four offloading schemes. It demonstrated significantly greater savings as the percentage of mobile data offload increased.

This model, Cisco says, can help mobile operators in South Africa reduce HSPA and LTE infrastructure costs by roughly 27% or USD $972 million.

Cisco cautions, however, that offloading data traffic to WiFi requires significant investment.

Based on its analysis, Cisco Consulting Services determined that South African mobile operators would have to invest $108 million between 2013 and 2017 to provide WiFi coverage to 564 buildings with total indoor space of 2.4 square kilometres and total outdoor space of 25.5 square kilometres.

Of this, $108 million investment, 20% would be allocated to Capex and 80% to opex. “Costs will be lower if mobile data traffic offload rates are reduced,” Cisco said.

Mobile Data Offload will have an impact on the following:

  • Massively growing demand: Mobile operators in South Africa are challenged to provide capacity for 1.39 Exabytes of mobile data traffic by 2017.
  • Counteract the heavy investment required to build HSPA and LTE infrastructures: Without offloading mobile data traffic, mobile operators will need to invest $3.55 billion in HSPA and LTE networks by 2017.
  • Additional investment required to provide WiFi coverage: Careful selection of indoor and outdoor WiFi locations will help operators maximise the use of mobile data traffic offload.
  • Mobile data offload presents significant cost savings: Offloading 30% of the overall traffic will enable mobile operators to reduce costs by 27% and obtain savings of up to USD $972 million in five years.

Peter Ford, director, Cisco Consulting Services, SP Practice, EMEAR said: “As demand for mobile devices and network connectivity continues to grow, cost effective Wi-Fi access will be critical for meeting the needs of mobility-enabled consumers in South Africa.”

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How SA operators can save 27% in infrastructure costs