Despite booming growth in data revenue, margins for wireless operators have been squeezed as they have been slow to react to the paradigm shift wrought by the explosive rise of broadband usage on smartphones and tablets, forcing the operators to embrace new revenue services and business models—including the cloud—to enhance profits, according to the IHS iSuppli Mobile & Wireless Communications Service from information and analysis provider IHS.

“Mobile communications service providers have lagged behind in the race to unlock the value in the mobile communications industry, which is estimated to grow to a trillion dollars during the next two years,” says Jagdish Rebello, Ph.D., senior director and principal analyst for communications and consumer electronics at IHS.

“Because of this, the average operating profit for wireless service providers around the world declined in 2010, even as semiconductor suppliers and device manufacturers improved their margins. With the transformative impact of tablets and consumer-centric smartphones, the pace of change is accelerating in the wireless market. And to reclaim their share of profits, wireless carriers must be willing to take risks, move fast and be innovative in their offerings. A key offering will be cloud-based services for tablets and other mobile devices that represent a new revenue stream for these companies.”

Sunny Days Ahead

Consumer and enterprise spending on the public segment of the cloud is projected to rise to $110 billion in 2015, up from $23 billion in 2010, as presented in the figure below.

The public cloud represents a concept of cloud computing wherein services, software and storage are configured and delivered, over the shared, public Internet infrastructure in a framework that is rapidly scalable, dynamically provisionable, on-demand and with minimal management requirements.