Days of cheap mobile broadband may be ending in Europe
Published: 25 February, 2009
Users enjoying low cost, high bandwidth mobile broadband services should make hay while the sun shines, especially in western Europe, because the good days may soon be over. Two reports from UK-based researchers, Omnitele and Strand Consult, conclude that the current business model is unsustainable for cellcos, because of the cost of building out capacity to meet rising demand for dongle or laptop 3G services.
Many are moving towards more flexible tariffs, offering pay-as-you-go options as well as contracts, and even daily or hourly access, on the Wi-Fi hotspot model (and as pioneered in the US by Clearwire). These will boost revenue and attract new, more casual users, but on a less predictable basis than contracts.
The Broadband Genie comparison site sums up the lesson of these reports for European carriers: "UK broadband providers are no mugs; prices are currently low as companies fight for numbers in a growing market, but they realize the situation isn't sustainable and will be looking to change packages and turn a profit in the near future."
With mobile broadband services acting as loss leaders in many cases, and voice revenues falling, Omnitele believes cellcos will adopt a range of measures to improve profitability, such as controlling "busy hour traffic" of heavy users and adjusting pricing. Strand Consulting said: "We expect mobile broadband products which cannot be used with VoIP and peer to peer file downloading services. However, the connection will be cheap and far below what we pay for home broadband. This could then have implications for fixed line broadband providers."
In other words, heavy users will pay more, or have their usage capped, voluntarily or otherwise; but casual users will be encouraged with better basic deals and more flexibility. There is still time to enjoy low cost, reasonably unfettered mobile broadband - Strand expects the changes to start taking effect in many European markets early in 2010.
More EUROPE News
More BROADBAND News
More HANDSET News
COMMENTS
Carrier Broadband Performance: Africa & Middle East
Carriers are using mobile broadband as their weapon of choice in the fight against the commoditization of voice and falling ARPU. This...
Voice over LTE: Market Analysis and Forecasts
VoLTE offer unique advantages in lowering a carrier's voice infrastructure economics and promises to improve voice quality, device...
Satellite Phones: Will Dual Mode Help the Phoenix Rise from the Ashes?
Satellite phones have followed an arduous path since their much-hyped launch more than a decade ago. The hype was followed by an e...
