Wednesday, February 08, 2006

Mobile broadband at DSL prices? Maybe.

So, there's this new report by analyst firm Berg Insight which talked about mobile broadband and how it'll be 2006's focus for MNOs.

One quote jumped out at me: "3G networks upgraded with HSDPA technology are going to enable peak data speeds of up to 3.6 Mbps at the end of the year for the same price as a DSL service with comparable performance," according to Tobias Ryberg, senior analyst.

Then they go on to point out that whereas DSL and cable connections are only available at fixed locations, mobile broadband solutions enable users to access the Internet anywhere. That, plus the soaring notebook PC shipments (they esimate 120 million laptops in Europe by 2009) imply a strong demand for mobility. HSDPA will be the mobile broadband technology of choice.

I think it's pretty dubious that they'd price match DSL. The idea that mobile operators will not charge for arguably their only USP (mobility) by pricing the service at DSL levels (3.6M =~ 2 x DSL) seems unlikely. I would expect it will more likely be ~1Mb for DSL prices. Case in point - prices in the US for Verizon EVDO. Sure, operators in Czech, Sweden and Portugal are offering pretty cheap mobile data, but they're still trying to get customers to make the jump to 3G. And the download speeds are still only 384k as far as I can tell.

Eastern Europe will be interesting because of the lack of cable/DSL broadband. The MNOs are stepping up to the plate to fill this gap in the market. Will they create a cozy little duopoly/triopoly and not throw away their pricing power?

I think the consistent coverage of 3G in Europe will probably drive the prices down, but I do not think that MNOs will sell MOBILE BROADBAND without the MOBILITY premium. At least that's what they're hoping - we all know that the market ultimately will decide what value mobility actually has. We have all become very accustomed to very cheap bandwidth these days.

Perhaps the most interesting point of the report is simply the number of people using data cards. But where are the USB dongle and PCI versions for desktop machines? That would really bake the radio planner's noodle.......


Anonymous said...

What happens to the picture when the mobile user isn't mobile. If you give me DSL performance that I can ALSO take with me ... well why don't I just take it with me to the house or office and park there for 8 - 9 hours.

The mobile network has a built in premium (expense) for mobility and needs it users to scoot around the place. The only thing it has going for it is not needing 2.5 miles of wire to hook you up b right at the end. In exchange for that it has to buy ridiculously expensive licenses to use the frequency spectrum that cut the wires. In addition there is all this stuff to keep track of you as you scoot around, and no expectation of consistent usage from any one location.

In the end it is probably a wash with the fixed guys being able to offer more B/W (and hoping the consumers will buy fancy services because of it) while the mobile guys are no strings attached.

If you took the government monopoly on frequency out of the picture - no contest ... mobile wins. Richard Branson can show you how that works.

Martin said...

There are some WLAN routers available (e.g. linksys) that have a PCMCIA slot for UMTS and HSDPA data cards. That way you can share such a connection via Wifi in a team (or with PCs without PCMCIA slots). That should do the trick for many.