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In a significant shift, Volkswagen has become the first major automotive company whose demand for mobile data surpasses the current capacity of network operators. This surge in demand has prompted telecom providers to invest billions into upgrading 3G and 4G networks, enhancing their speed and performance. To address rising operational costs, network operators are adopting advanced technologies like Remote RF systems and FTTA (Fiber to Antenna), which offer more efficient, flexible, and scalable solutions for future network needs.
The rapid evolution of mobile networks is driven by user demand. Mobile broadband has now become a standard, with 3G networks (UMTS) capable of speeds up to 10 Mbps, and the next-generation 4G LTE promising speeds of up to 100 Mbps. While 3G was introduced at the start of the 21st century and met early market needs, 4G is fundamentally shaped by users' growing appetite for data. Since 2009, smartphone sales have surged globally, with a 24% increase in worldwide shipments, while traditional phone sales declined. In Germany, smartphone adoption grew by an impressive 79% in one year alone. Smartphone users consume significantly more data than their predecessors, leading experts to predict a tripling of global mobile data traffic between 2010 and 2015.
This exponential growth has pushed mobile networks to their limits, forcing operators to invest heavily in 3G and 4G infrastructure. Unlike earlier GSM networks, modern systems such as UMTS and LTE operate on higher frequency bands—like 2.1 GHz or 2.6 GHz—which allow for faster data transmission but result in smaller cell sizes, especially in urban areas. However, these higher frequencies reduce signal coverage, increasing the cost of rural network expansion. More cells mean more investment, and high-frequency signals struggle to penetrate large buildings, necessitating indoor coverage systems like IBC. Thus, using lower frequency bands becomes a more economically viable option, offering better bandwidth without excessive costs—a concept known as "digital segmentation."
Following the transition from analog to digital terrestrial broadcasting, the low-frequency band below 800 MHz became available for mobile use. In May, the German Federal Network Agency auctioned this spectrum to major carriers—Deutsche Telekom, Vodafone, and O2—for 4.4 billion euros. Each carrier received two frequency subgroups, and they are now required to expand broadband access to underserved regions. With this development, Germany’s path toward mobile broadband is clear, and the rollout of 4G networks is set to begin this year.
Reducing operating costs has become a top priority for mobile operators due to the massive investments required for new network infrastructure. As the number of cells increases and multiple technologies like GSM, UMTS, and LTE coexist, maintenance and operational expenses continue to rise. Meanwhile, revenue growth has been limited by slower data speeds and declining voice call revenues. The real driver of income now is high-speed internet, data services, and media content.
On average, network-related costs account for 30% of total operating expenses for mobile operators. A third of these costs comes from rent, technical maintenance, and data return, while the remaining two-thirds are electricity costs. The industry's goal is to cut 3G and 4G network operating costs. Leading manufacturers like Ericsson and Huawei are committed to “green†network policies, focusing on energy efficiency, renewable power sources, and software-driven optimization. Modern base stations are now more compact, energy-efficient, and flexible, reducing both costs and site rents.
Remote RF systems have emerged as a game-changer in reducing network costs. Traditional base stations rely on coaxial cables to transmit high-frequency signals from the main unit to the antenna, resulting in significant signal loss—up to 50% depending on distance and cable size. This loss can also degrade signal quality. The latest technology uses remote radio heads (RRHs) mounted close to the antenna, minimizing signal loss and improving efficiency. These RRHs also feature passive cooling, eliminating the need for active cooling systems found in conventional setups. As a result, energy consumption drops by 25% to 50%, depending on configuration.
Modern base stations are much smaller, thanks to the elimination of heavy cooling systems and the integration of power amplifiers into the RRH. Since 1990, Ericsson has reduced the footprint of its base stations from 23 square meters per 400-carrier unit to just 1 square meter today. This not only cuts system costs but also lowers site rental fees, making remote RF technology a key solution for sustainable and cost-effective network expansion.
August 31, 2025