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Telecom TV: Mobile broadband explodes, but just selling capacity won't be enough for mobile operators
Everyone knows broadand mobile is going stratospheric in all the developed markets where it's being rolled out. In North America the hero (and villain) in the piece is the iPhone which has so changed the mobile browsing habits of its owners that it's managed to clog AT&T's network, even at this early stage. AT&T simply didn't foresee the huge habit change that comes when users have dozens of mobile Internet apps under their finger-tips and are happy to use them.
The same dynamic is unfolding in other markets and with other phones, including the new crop of Android handsets currently making their way onto the market. In Europe mobile broadband subscribers and revenues (and data demand) are set for near 100 per cent growth by 2011, according to thet European Mobile Broadband report was issued yesterday by CCS Insight and the GSMA.
The business might be ramping up, but the revenues to make it profitable aren't. "The business case as things stand just doesn't make sense and it's difficult to justify investment in mobile data as a stand-alone business," he says. According to Collins, there doesn't yet appear to be any nailed down way that mobile operators can monetize mobile data via services to make an investment case for LTE, for instance, compelling enough.
So if the broadband data services are all delivered and monetized by third parties, can the operators make enough from just selling the data capacity? Collins thinks that's going to be difficult, especially as the operators have been generous with data allowances for the first wave of contracts and for all-you-can eat offers for data dongles. But, he says the picture is mixed.
"In Italy, most access is charged by the minute, while operators elsewhere, particularly in the UK, have largely adopted flat-rate, all-you-can-eat models," he says. "It's quite possible that services there are actually going to have to go up in price to make the move to LTE viable."
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