Mobile broadband mushrooms in Europe, but users increasingly dissatisfied
Published: 3 November, 2008
Mobile operators' claims over their laptop-based broadband services are increasingly coming under fire, and research by UK carrier O2 finds that over one in 10 users feel they have been misled by adverts or other sales messages.
Facing the likely squeeze on consumer uptake of new handsets, amid recession and saturating markets, operators in western Europe are relying heavily on luring fixed line voice and broadband subscribers to the wireless connection, and eking additional euros out of existing and new customers by selling attractive data plans based on embedded or dongle-based HSPA links.
However, in their eagerness, several carriers in Europe have already fallen foul of advertising standards authorities for implying HSPA can deliver the same performance as wireline services.
In fact, the main consumer gripe seems to be a perennial one about cellcos - confusing pricing information. O2's survey found that many consumers felt deceived about costs, and almost one-third said the ongoing cost of mobile broadband was higher than they had anticipated. Also, 20% said that coverage was less good than they had expected from carriers' 'use everywhere' claims; 13% said there should be a returns guarantee if the service proved not to be right for them; and around half wanted inclusive Wi-Fi as standard (O2 presumably focused on this issue, since it is the only cellco to include Wi-Fi in all its dongle plans).
"Across the industry there are too many customers whose mobile broadband expectations have been set too high and have then been disappointed, which is a terrible shame given there are loads of people who are having a great time with mobile broadband," said Peter Rampling, marketing director at O2.
Despite user complaints, the uptake of mobile broadband in western Europe, spurred on by 'free laptop' offers and 'unlimited' data tariffs, has grown between twofold and eightfold, depending on region. Currently, this is a good way to increase user numbers and ARPU and reduce under-usage of the HSPA networks. However, in the 3-5 year timeframe, unlimited data services will become commoditized and fees may fail to offset the cost of delivering the traffic on increasingly congested networks, warns a new report from Parks Associates. The company says service profitability will gradually be reduced, limiting operators' ability to invest in networks and grow the service, especially as users' definitions of 'unlimited' become more demanding.
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