"Smartphone user growth translates into skyrocketing mobile data usage, which will test network capacity as well as pricing power of the operators," noted Parks Associates.

Parks Associates noted that operators have several solutions to manage escalating data traffic, and two of them rely on capital expenditures: 1) Intelligent network policy protocols to prioritize network traffic by type through solutions from companies like Tekelec; 2) Traffic optimization tools for data-intensive applications such as video using solutions from companies like Bytemobile; 3) Offloading solutions such as Wi-Fi and small cell technologies from companies like Kineto Wireless and IP Access; and 4) Expand capacity-acquiring spectrum and move traffic to more efficient networks like LTE.

However, the ROI model for that investment is far from clear. Charging more, implementing usage-based data plans and offering tiers of service can only go so far--and often frustrate rather than delight customers. "Only 58% of U.S. mobile data users are very satisfied with their monthly data quota, and an even lower percentage (41%) are satisfied with the price of their current data plan," said Parks Associates. "How mobile operators address consumer data needs and dissatisfaction with costs will be critical issues in 2012."

From the article, "Escalating mobile video usage will force operator investment in 2012" by Michelle Clancy

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