Ivan Seidenberg, CEO of Verizon Wireless set a BHAG (Big Hairy Audacious Goal) of 500% market penetration for mobile devices at his speech at CTIA this month. Is this realistic or feasible? Will this encourage femtocells to make it happen?

We’ve already exceeded 100% penetration in many countries

Many countries have already exceeded 100% mobile phone saturation. This means the number of mobile phone subscriptions (not necessarily the same as number of mobile phones) exceeds the population. You can see the evidence for this backed up by many businesspeople who have separate devices for voicecalls (a small phone handset), email (Blackberry or similar) and a USB data dongle – each has its own SIM card and associated subscription. Both prepaid and postpaid accounts are included in these totals, although short term SIM cards sold to tourists and visitors may not.

500% means many more machine to machine applications

The premise of future growth is based more around machine-to-machine applications – everything from automobiles to smart health monitors could include an embedded mobile network connection. With the cost of a basic GSM device chipset under $2 today, the incremental cost of this connectivity for many consumer electronics devices isn’t unreasonable. It could be subsidized by potential revenues of services from the manufacturer’s website – printing your photos, scheduling your auto maintenance or even your health checkups.

We’ll insist on always on, available everywhere connectivity

Mobile phone networks have the advantage of being available everywhere, not just at home, work or other hotspots. I’ve found that Wi-Fi hotspots can be great where they’re available, but see them as a bonus rather than wanting to depend on them solely for connectivity. Mobile network operators have the opportunity to cash in on this potential enormous growth in number of devices if they can make it easy to subscribe through their networks. By that, I mean being very cost effective (to match usage) and offering bundles of multiple data SIM cards within a single account, easy signup/registration and excellent performance.

Operators are investing in their own innovation centers

Also mentioned in this speech, Verizon will be setting up its LTE Innovation Center to incubate and encourage development of new applications for its LTE network. This will focus on working with consumer electronics, telematics and machine-to-machine products for health care, security and utility metering. Many other network operators also have their own innovation centers and 3rd party developer programs.

This huge number of mobile devices will need a different network topology

I’ve said before that the predicted heavy growth in data volume on mobile networks creates a strong case for data offload through femtocells. It’s not just the data traffic itself, but also managing always on connections to huge numbers of devices that strains the traditional mobile network – especially the radio interface.

If we all have 5 mobile devices (on average), then the signaling and data traffic from them will certainly need a radical rethink. Machine to machine types of communications can be deferred to offpeak times of the day, unless there is a particular need for more urgent updating. This could allow some devices to wait until you get home or overnight offpeak periods where larger data uploads occur.