The Mobile Internet Report Key Themes*

Network Congestion in High Density Areas Should Improve
Owing to Relatively Cost-Effective Nature of Capacity Investment
High density areas represent the biggest area of concern for carriers – In these
areas, networks run the risk of heavy data users congesting network and
crowding out light data / voice users. Vodafone recently reported that only ~5%
of sites are suffering high utilization (defined as 90% utilization during peak
times, while the rest of the network averages ~30% utilization), but these sites
are often used by a large number of people and need to be improved to
reasonable network performance.
Increasing capacity is less costly than increasing coverage – Whereas coverage
investment requires erecting towers, laying miles of backhaul, and maintaining a
scattered network, capacity investment in high-density, urban areas (where fiber
/ towers are already in place) requires only upgrading technology on the towers.
As a result, these hotspots should be easier to address, and carrier capex should
translate into more capacity than historical precedent (where coverage was main
focus) might suggest.
Source: Ehud Gelblum, Morgan Stanley Research. 431