LIVE FROM COMMUNICASIA 2013: Operators need to take tough choices in order to protect their margins as the balance of services shifts from lucrative voice and SMS to data, Juan Rio of Delta Partners advised.

With operators worldwide at various stages of the LTE rollout process, it was noted that a careful investment strategy with regard to buildouts is essential.

“We don’t want to have a very big LTE network where the utilisation level is around 20 per cent, and then the costs per gigabyte are high”, he warned.

The obvious action to counter this is to drop prices to drive further usage – but this then negatively impacts the financials.

“There is no better way to increase traffic than to drop prices…fine you can get your volumes up, but your revenue will not go so much up, and your margins will not go so much up,” he said.

Rio also suggested that operators “right size” existing networks, where investments already made are providing more capacity than needed.

“OK, dismantling a 3G network doesn’t make sense, it’s costly, and so on. But decrease your opex: if you need to switch off base stations for the time being because there is no usage, just switch them off,” he suggested.

“It’s not that you have to switch them off and never switch them on again – you know who your customers are and what data they are using, so whenever you see demand, you switch them on again,” he continued.

And Rio also suggested that operators look to take advantage of the customer data that they have on hand in order to create additional revenue streams.

“The fact that we have technology that allows for lots of traffic to go across our network means that we have more and more information about what the client is doing in our network and the internet,” he said.

“This more and more is something that is relevant and can be a source of monetisation for us in different ways”, he noted.