Ken Denman, CEO of Openwave, looks at what the industry can do to cope with the imminent tsunami of data as Smartphones and other mobile devices grow in popularity

After years of talk about mobile data services, the day has finally arrived where demand is close to matching the hype. Instead of figuring out how to entice users to adopt new applications and services, the main issue at hand is how to deal with the imminent tidal waves of data usage heading to operators' networks. 
In the last two years, weve seen Smartphones move to the mainstream, and we can expect continued uptake, along with the development of other mobile devices such as netbooks and PC dongles. According to Strategy Analytics, by 2011, the amount of mobile data traffic will increase nearly fourfold from its current levels.

Two waves
At Openwave, weve been closely tracking the amount of data on networks, and have identified two approaching waves of demand for mobile data. As stated above, the first is upon us: the arrival of Smartphones in the market. From mid-2006 to mid-2009, the volume of data served to Smartphones increased almost 100 times. In the US market, the current amount of data traffic represents around 100 petabytes (100,000 terabytes) per year. By 2012, this could grow to as much as 250 petabytes.
At the same time, weve seen that the volume of data served to feature phones peaked in 2008 and has started dropping off as Smartphones are replacing feature phones as the device of choice for mobile data consumers. Current data volume totals for feature phones in the US are around 8 petabytes, projected to drop to around 5 petabytes by 2012.
While this trend is important for operators, we predict the second wave of demand fuelled by new mobile devices will completely eclipse the growth in Smartphones, both in terms of magnitude and speed. Current levels stand at around 800 petabytes per year in the US, but we feel that this could exponentially grow to nearly 4500 petabytes by 2012.
The situation is the same in Europe. The analyst, Forrester, predicts that 125 million Europeans will access the mobile Internet by 2013, more than tripling todays number of users. According to a December 2008 comScore report, 25% of the total UK population now accesses the Internet from a mobile device, up 9% on last year.
While the growth is largely driven by better hardware, we have also seen a number of other non-traditional players entering the mobile Internet market and sparking competition. In February, France Telecom-Orange announced a large push into the combined mobile and PC Internet space, through a joint deal with HP. Skype announced deals with Nokia and Sony Ericsson to integrate its service into several different phone models. Before Christmas, the operator Hutchinson and handset vendor INQ, launched the INQ1, which integrates data services such as Facebook, MSN and eBay directly into the software of the handset.

User Experience 2.0
As we have witnessed in the traditional web, niche information and personalised content are usurping mass market hits. We now see major brands prioritising the customer experience and exploring the best ways to reach their customers through what some are calling User Experience 2.0, an attempt to proactively unite users with relevant content and services. The goal is to make content discovery much simpler and more targeted, eliminating the awkward left-to-right scrolling when browsing, presenting relevant content first, and improving site navigation. It is a dynamic process of interpreting the content being served and enhancing and adapting it on the fly to provide the best possible user experience.
User Experience 2.0 is an exciting prospect for consumers, but it can be a little bit daunting for operators. Networks are already struggling to support the increase in traffic; a better experience will only increase traffic volume.
And thus, the operators are faced with the current dilemma of investing in their infrastructure during uncertain economic times. Cutting corners could result in a poor user experience, impacting the operator directly as subscribers are more likely to blame the network than the handset or content provider.
Operators must figure out how best to spend their money to cope with this massive increase in data demand, improve the experience, and monetise it in a way that benefits their business and their subscribers. 

Content optimization
In the short term, operators can take rapid action to ensure they are optimizing their networks. The key is to use data management and compression techniques. Openwaves experience with customers around the world, including Telstra in Australia, has shown how the ability to rapidly scale to meet changing customer needs, as well as support new protocols, content types and applications, is critical to competitiveness.
Integra, Openwaves mobile Internet platform, is designed with open interfaces to flexibly address the market's need for fast, open and secure service management. It also gives operators the ability to introduce new services, without having to overhaul the infrastructure, which can deliver significant cost savings. At Telstra, the introduction of Integra has brought a fourfold efficiency gain over an equivalent WAP gateway.
In the long term, however, bandwidth management will require more than just optimization. Some operators are considering whether a tiered usage and cost model will be better for their business than the current all you can eat subscriptions. If so, they must figure out how to migrate their users to this new pricing structure. Smart operators will be able to distinguish themselves from their competitors by offering premium services to customers. This will require close bandwidth management, in order to make sure that a sufficient portion is reserved for these preferred services.

More devices, more opportunity
The expanding eco-system of the mobile Internet will also bring new business opportunities for operators. New devices mean new mobile Internet services and additional sources of revenue. The introduction of the iPhone alone has increased data traffic six-fold per customer. The Blackberry Storm and other popular mobile devices will only solidify these trends.
In order to launch the right services, its critical for operators to gain a deep understanding of consumers online habits. Openwaves Mobile Analytics tool does just this, working seamlessly and unobtrusively with the data access portal to monitor usage. Mobile Analytics gives operators significant advantages by combining demographic information with data consumption patterns to deliver relevant products and targeted advertising to consumers.
If operators are slow to act, the market will move without them and they will be marginalised to the role of a dumb pipe, mere providers of flat-rate data access, similar to the fixed-line operators before them. Operators need a solution that capitalises on their core business and unique assets to add value across a mass market of handsets. 
Openwaves Mobile Internet platform and services are a mass-market approach to bringing the PC Internet to mobile devices. Leveraging the mobile operators network ownership and direct relationship with the consumer, the solution not only helps deliver a fast, safe and seamless user experience, but gives operators the monitoring tools to manage traffic and effectively market their services. 
It is clear to us that the scale of the challenge facing the mobile industry
is immense. It is therefore absolutely paramount that operators embrace it head-on, invest in capacity and begin to develop services that will make the most of the coming opportunities. Some already have, but more need to follow.