If mobile operators are to remain relevant in a data-centric world they will need to invest more in OSS/BSS systems (to enable more flexible charging mechanisms), focus on QoS as a differentiator, and embrace open APIs to encourage third-party innovation and OTT partnerships.

This is the view of Ulf Ewaldsson (pictured), Ericsson’s CTO, who, in an interview this week with Mobile World Live, also pointed to “over-competition” and price regulation in Europe, which is holding back network capital expenditure.

According to Ericsson’s calculations, the volume of mobile data traffic is doubling every year worldwide, spurred on by video. Accounting for just less than 40 per cent of all mobile traffic today, Ewaldsson expects the video portion will exceed 50 per cent in about five years’ time.

“[Technology developments mean that] network capacity issues are under control,” says Ewaldsson, assuring operators, among other things, that suppliers have the know-how to weather smartphone “signalling storms”. Moore’s Law, he adds, is alive and kicking in RAN technologies.

Where operators need to pay more attention, he argues, is “transforming the IT environment” and to move away from voice-centric to data-centric business models where revenues and capital expenditure are more aligned with data volume growth. If accommodating increasing amounts of data over the network is soaking up capital expenditure, but revenues revolve around voice – which is not a growing business – operators are hardly in a strong position.

To help avoid such an outcome, Ewaldsson says a revamping of OSS/BSS systems will be required so they are capable of handling more sophisticated data charging models (perhaps application-based, time-based, or even micro payments).

OSS/BSS has become a key strategic area for Ericsson since its purchase of Telcordia in 2011, which, in turn, is tied closely to the Swedish supplier’s Service Provider SDN (software-defined network) proposition.

Building on the standardisation work of the Open Networking Foundation to define an SDN architecture, Ericsson’s “service provider” version has additional enablers, including end-to-end network management (all the way from the device through to the data centre) and service exposure through open APIs.

“We need to change the paradigm of the industry and not compete against OTT players,” says Ewaldsson. “I think that will happen. What we now call OTT will become the best friends of our industry as it drives up data usage. But we need to open up networks. Open APIs are key for industry partnership.”

Combining IT development with network investment is at the heart of Ewaldsson’s thinking. He refers to work on WebRTC – an HTML 5-based browser for setting up real-time video, voice and file-sharing without the need for a plugin – as another example of possible convergence between the IT and telecom worlds. “We would like to provide code into WebRTC which makes the network more relevant,” he says.

The Ericsson CTO implies, however, that there needs to be a wider industry effort to make sure that mobile network operators add more value than, say, Wi-Fi networks. “We can’t be the only defenders of the network,” he says.

IMS, too, can also be deployed by operators to improve customer experience by shortening set-up times for SIP-based call and data sessions, although Ewaldsson concedes that the prime application for IMS is GSMA VoLTE. There’s currently little demand, particularly from standalone mobile operators, for IMS-based RCS/RCS-e.

Of course, IT transformation and capacity upgrades all require significant investment. And it is in markets where operators’ business models are more aligned with data growth – such as Australia, Hong Kong, Japan, Singapore and the US – that Ewaldsson finds the most operator interest in IT transformation and open platforms.

The US, arguably, is out in front. “From our experience in North America, the requirement from operators is much more surrounding QoS as they are competing on better and better performance,” he says. “They are measuring every drop of data in every cell. A lot of our R&D is going into that.”

By contrast, in some European cities, dropped voice calls and data sessions are not even a concern observes the CTO. “The ability to charge for data is weaker in Europe than other parts of the world,” he explains, which means operators in the region tend to be more capex sensitive than in markets where revenue growth is more aligned with data growth.

In addition to national and EU price regulation putting a squeeze on European operators, Ewaldsson highlights fierce competition in the region. “Consolidation has not happened to the degree it might have to,” he adds. “It’s tough in Europe.”