Carriers: down with unlimited data and free services

BARCELONA, Spain -- Cash-strapped carriers moving to 4G mobile networks need to toe the line and avoid the big problem of the 3G era: unlimited data plans.

That was the exortation from Sok Koong Chua, CEO of Singtel, a carrier that offers mobile networks in Singapore, Australia, and several other countries.

"We need to be more discliplined. 4G is bringing so much more capacity to our networks. Let's not repeat mistake of 3G," she said in a speech here at Mobile World Congress, a show run by the organization that represents more than 800 such carriers.

Unlimited plans have meant that even as demand for data exploded, average revenue per user (ARPU) has decreased at 2 percent per year.

"The main problem we have as an industry is we have been unable to monetize this increased demand," she said. "The industry we're in has consistently underestimated data traffic growth. Wearables could become the catalysts that choke our 4G network," she said, referring to new wearable-computing devices like fitness loggers, smartwatches, health monitors, and computerized eyewear.

But she made it clear she wasn't just complaining. With the central positions smartphones have in people's lives, the mobile industry is in an enviable position, she said: "I'm not all doom and gloom. Businesses and consumers will always need connectivity. Most marketers would be dying to have a product that their customers are dying to reach out for the moment they wake up."

Being a mobile operator is an expensive business: they must continually upgrade geographically broad mobile networks and pay expensive fees to license wireless spectrum from governments. Naturally, carriers often want the governments to help with the financing, one way or another.

Without sufficient network investment, our economies will suffer and business investments will move to other countries," she said. "Governments need to recognize this and encourage the necessary investments to be made" in mobile infrastructure.

Singtel wasn't the only carrier chafing at the business bind.

America Movil has seen increased its capex spending 121 percent per year since 2001, added the Latin American carrier's CEO, Daniel Hajj. Since 2008, data traffic increased by a factor of 15.

"It will take $1 trillion of capex [capital expenditures] in the next five years to meet the expected mobile growth," added Ahmad Abdulkarim Julfar, CEO of Etisalat, which is based in the United Arab Emirates.

Jon Fredrik Baksaas, CEO of Telenor, also said there's no free lunch in the mobile industry, even though customers have grown accustomed to free services like Facebook.

"The idea that everything comes for free is a very strong notion, [but] this sense of this being free is wrong," Baksaas said. "We have public transportation. We want it to be free, but it's not. These investments will only happen if there is a plausible business model behind it."