February 16, 2010 / 12:51 PM / 8 years ago

Blackberry maker RIM warns of bandwidth crisis

VANCOUVER (Reuters) - Taking aim at rivals like Apple Inc (AAPL.O), BlackBerry-maker Research in Motion Ltd RIM.TO said on Tuesday that smartphone manufacturers must start developing less bandwidth-guzzling products or risk choking already congested airwaves.

As users abandon traditional cellphones for netbooks, wireless modems and feature-rich smartphones, like Apple’s iPhone, wireless data traffic has exploded and is threatening to saturate network capacity, RIM co-CEO Mike Lazaridis said.

Wireless carriers, especially in congested North American urban centers, are already showing signs of stress, with dropped calls and slower data transfer speeds.

“Manufacturers had better start building more efficient applications and more efficient services. There is no real way to get around this,” Lazaridis said in an interview.

“If we don’t start conserving that bandwidth, in the next few years we are going to run into a capacity crunch. You are already experiencing the capacity crunch in the United States.”

Lazaridis is taking this message to this week’s Mobile World Congress in Barcelona, the mobile telecom industry’s largest annual trade fair.

Industry executives and analysts are increasingly warning of an impending bandwidth crunch as users fall in love with the freedom of wireless. Unlike fiber optic cables, which boast enormous data-carrying capacity, wireless applications must all share the same, limited spectrum.

Smartphones already account for some 25 percent of mobile phones today, and could reach 50 percent within the next couple of years, according to market research company Nielsen.

At the same time, smartphones consume 30 times as much bandwidth as a traditional cellphone, with iPhones -- or “iHogs” as an analyst recently dubbed them in a report -- some of the worst offenders.

Mobile personal computers gobble about 450 times the amount of a typical cellphone, analyst Peter Misek at Canaccord Adams said in an October 26, 2009 report.

    Analysts have praised Waterloo, Ontario-based RIM for its relatively bandwidth-light BlackBerrys, which route most emails through the company’s own servers. This is a legacy of earlier days when the company was first starting out and sought a faster, more secure mobile email service for its business customers.

    Reports out in the past year say BlackBerrys are at least five times more efficient at email and attachment viewing than any other platform. On Internet browsing, they are three times more efficient than other carriers, according to a report by Rysavy Research released on Tuesday.

    “That is pretty fundamental to a carrier as that means you can have three paying Blackberry browsing customers for every one other customer,” Lazaridis said.

    “That has a huge advantage for the carriers if you think about the many billions of dollars the carriers have invested over the last five years in spectrum auctions and infrastructure rollouts,” he said.

    RIM on Tuesday also announced the release of a promised new product for small- and medium-sized businesses. Its Blackberry Enterprise Server Express, software that wirelessly synchronizes BlackBerry smartphones with Microsoft Exchange or Microsoft Windows small business server, will be available free from March, RIM said.

    Editing by Janet Guttsman and Muralikumar Anantharaman

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