[November 29, 2011]

Fiber to the Tower Will Help Carriers Handle Stressed Mobile Networks in 2012, According to M/C Partners' Top 10 Communications Trends To Watch List

Carriers will be putting a huge emphasis on fiber-based services to deal with mobile networks that are being pushed to their limits, according to M/C Partners, which today is releasing its annual list of the top 10 communications, technology and media industry trends to watch in 2012. A dramatic increase in cloud services and video consumption are creating serious challenges for carriers, who will be scrambling to address the issue. Many will use fiber to upgrade cell tower backhaul networks to raise network capacity, according to the private equity firm's list.

M/C Partners compiled the list as part of its ongoing research to understand industry trends and identify investment opportunities in the communications, media, and information technology sectors.

According to M/C Partners, the leading trend in the new year will be carriers' use of fiber to upgrade cell tower backhaul networks to gigabit connections, a staggering increase from the 1-2 megabits carriers provisioned to cell towers only a few years ago.

"As mobile users expect their phones to operate more like PCs and increase their consumption of social and traditional media, mobile networks are being pushed to their absolute limits," said James Wade, Managing General Partner, M/C Partners. "Adoption of cloud services and mobile consumption of video are only in their early stages, but growing very quickly. Networks are struggling to handle it right now. What will happen when demand grows ten-fold, as it likely will? Ubiquitous fiber will be the solution."

Trends on the M/C Partners' list include:

1. Fiber to the tower will become the number one priority for network operators strggling to deal with mobile users' insatiable thirst for broadband.

2. Enterprise adoption of cloud-based services will drive demand for network-based managed services that will provide critical monitoring and management of application and service performance across LANs, MANs, WANs and the public Internet.

3. New technological innovations on the handset and in the network will improve important services like caching, compression and signaling to enhance mobile user experience, battery life and network access.

4. Consumerization of the enterprise will expand as end users move from simply driving iPhone (News - Alert) and iPad adoption in the enterprise to pushing IT departments to provide more user-friendly and consumer-style applications for information sharing and management.

5. Micro-transaction business models will expand from social games into MMOGs, console games and other areas such as video, social networks and communications services providing consumer-directed price discrimination across a range of services.

6. HTML 5's simplification of mobile application development will improve app economics, competition and usage by providing a seamless cross-platform experience and backward compatibility to the PC environment without sacrificing performance.

7. Consumers will realize the value of managed technology services from OEMs, broadband service providers and independent tech support companies to maximize the utility of their networked devices, as the need for better performance and up-time becomes increasingly valuable to consumers.

8. The content rental model will push beyond music and video into print publications with tablets providing an improved consumption medium that content owners will seek to fill with magazines and books.

9. Marketing options for small local businesses will expand beyond daily deals into more powerful tools that provide better yield management and integration with traditional local media and direct marketing for improved customer acquisition and lifetime value of customers.

10. Cable operators will answer over-the-top threats with apps and more subscription package variety to gain the upper hand in alternative video viewing options for consumers while still preserving the critical distribution and billing relationship.

About M/C Partners

M/C Partners is a private equity firm focused exclusively on the communications, media, and information technology sectors. The firm has invested over $1.5 billion into nearly 100 companies in those sectors. Companies M/C has backed include Cavalier Telephone (News - Alert), Corelink, Fusepoint, GTS Central Europe, ICG Communications, Legendary Pictures, Lightower, MetroPCS, NuVox, Open Mobile, Public Mobile, Seven Networks and Zayo Group (News - Alert). The firm has strong institutional backing from the nation's leading pension funds and endowments as well as a long track record of success. M/C Partners has offices in Boston, San Francisco and London. For more information, visit www.mcpartners.com.

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