According to the latest data from the UK broadband comparison website Broadband Genie, only around one in ten (11 per cent) mobile broadband users are satisfied with the speed of their mobile broadband. The data claims that exaggerated advertising and unrealistic ‘up to’ speed claims have given the public an unrealistic expectation of mobile broadband that the service cannot live up to. And of course, some operators are better than others as this comparison between Vodafone UK and 3 UK shows. At least from this person’s experience, 3’s mobile broadband service just does not work.
The consensus opinion is certainly that mobile broadband is not a profitable business (yet) in Western Europe (especially in countries like UK) where mobile broadband prices are trending lower than fixed broadband prices. I have always wanted to do a quantitative analysis.
The analyst firm Informa claims that fixed-line costs in Europe are near Eurocent 0.1-0.5 per MB, compared with Eurocent 2-3 for mobile networks. We can use this number to compare the cost basis for various operators’ quota-based mobile broadband packages. For example, 3 UK’s package is as follows:
So if you use the 2 Eurocent per MB number, 1 GB costs ~20 Euros (or 18 pounds) significantly more than the 10 pounds that 3 seems to be charging for the 1 GB package. Assuming a user who signs up for a 7 GB package uses ~2 GB, the cost for 3 to support that user is ~36 pounds which is still a lot higher than 25 pounds. I am not sure about you, but I sure don’t see how 3 is making money on these mobile broadband packages.
One of the supposedly big selling points of Xohm – Sprint Nextel (now Clearwire) – WIMAX service was the availability of flexible pricing models that does not tie the customer for an entire month. For example, it looks like they have a Daily On-the-Go service that provides 24 hours of continuous Internet service. They have a $5 per day special offer that lasts until the end of the year (after which it goes back to its regular rate of $10 per day).
3 in UK has been offering Pay-As-You-Go pre-paid plans for a while now, though they are not strictly what you would call day plans. Out here in the US, Verizon Wireless has upped the ante with its BroadbandAccess DayPass plan which allows you to experience the Internet continuously for 24 hours for $9.99 per day.
According to the website, it can be used on select notebooks from Dell, HP, Lenovo, Panasonic, and OQO, or with a Verizon Wireless USB modem or ExpressCard. Self-activation is possible and additional sessions can be purchased via the connection manager.
There have been complaints that claim that Verizon forces you to sign up for their cell phone plans and it is really not that simple as the website makes it out to be. In any case, I hope that Verizon Wireless has fixed those issues for this is truly a product that will have an adverse impact on Sprint’s Xohm service.
I have been commenting quite regularly in this blog about how mobile broadband (based on USB dongles and modems) is increasingly being used by mobile-only operators (those without fixed assets) to accelerate the replacement of fixed broadband, primarily in Europe. The spectacular growth in mobile broadband subscriptions is being driven by aggressive pricing from mobile operators, along with free laptop bundling offers – built-in 3G support for laptops and netbooks isn’t hurting either. One missing element in this puzzle has been a way for multiple members in a household or a small office/home office to share a mobile broadband connection in a simple plug-and-play fashion. Enter the consumer-friendly WiFi-over-3G Router! 3 UK is rolling out the nifty Huawei D100 router – insert your dongle into the router and share your mobile broadband with WiFi-enabled devices such as PC, Mac or a laptop. The 3 store claim “There’s no need for a landline, because the Wireless Router does all the work” is a clear indication that they are going after fixed broadband. If most people are already making voice calls on their mobile phone, it is a small step for the consumer to wonder if he needs the landline at all! It remains to be seen how many consumers will be happy with a monthly usage plan under 15GB especially with the increased usage in online video. Surprisingly, the mobile broadband plan for the router does not include the 15GB monthly allowance plan (which is an option for the laptop plan) – for some strange reason, only the 5GB allowance is available. One would expect that people who buy into this 3G Router in order to share their mobile broadband would sign up for a plan with a higher monthly data allowance. Clearly, 3 is also looking for this product to create stickiness – 3’s compatibility statement indicates that the router has firmware to ensure that a modem from any other carrier does not work properly.
I am a little surprised that 3 UK is not offering a bundled voice + mobile broadband offering. Both (3) Sweden and (3) Austria have been selling Huawei’s 3WLAN Router E960/E970 for a while now – in addition to 4 Ethernet interfaces and WLAN support, this 3G Router also has a RJ11 interface, ideal for connecting the black phones. It is not clear if voice is transported as VoIP over 3G in this case. Several operators including Vodafone Egypt and Optus (Australia) are offering this product in their mobile broadband portfolio as well.
T-Mobile in UK announced a similar product called “Mobile Broadband Share Dock” earlier in the month, but unfortunately, it is still not available for purchase (unlike 3 UK). The concept is similar – plug in your old T-Mobile USB modem or a new one into the dock and share the mobile broadband amongst as many as three people (3 UK claims their product can support 4 end users). I am betting Vodafone and the other operators in UK will follow suit if this concept catches on.
At the recent Citigroup Technology Conference, Dell’s CEO, Michael Dell indicated that the strategy for selling the company’s ‘netbooks’ would be via the wireless network operators – the former would be subsidized to consumers along with 3G service. Actually, this model is not new – Carphone Warehouse in UK has been giving away free laptops in exchange for a 3G subscription for many months now.
CARPHONE WAREHOUSE - FREE LAPTOP OFFERS