Tag Archives: Tre

Mobile Broadband in Sweden – Still Growing

Last year, I wrote about the explosive growth of mobile broadband in Sweden. According to the  National Post and Telecom Agency (PTS), which publishes an annual report on the state of the Swedish Telecommunications Market, the number of mobile subscriptions via data plug-in cards or USB modems increased from 92,000 to 376,000 (a growth rate of around 309%) during 2007. The rate of growth in mobile data traffic was even steeper -  total mobile data traffic increased by over 1000% during 2007  (from 203 TB to 2,191 TB).

Well, the PTS has come out with the 2008 report on the Swedish Telecommunications Market highlighting the state of the mobile broadband in Sweden last year. The number of active customers with broadband in Sweden  increased from around 3.156 million to 3.782 million between 2007 and 2008, corresponding to a growth of approximately 20 per cent. Mobile broadband represented 80 per cent of this increase, proving once again that people with dial-up connections are choosing mobile broadband over fixed broadband.

Naturally, mobile broadband traffic continues to grow as the accompanying picture shows – traffic grew from 2191TB to roughly 9TB (a growth rate of over 310%). Sweden_traffic growth_2008

Source: Swedish Post and Telecom Agency (PTS)

But this growth is clearly not generating adequate incremental revenue to the operators – revenue per GB has decreased from SEK 3000 to roughly SEK 200 (SEK 1 = US$0.14), which amounts to US$28 per GB. In an earlier entry, I commented on the profitability of mobile broadband service – I used Informa’s cost estimate of 2-3 Eurocents per MB, or ~20 Euros per GB which translates into ~US$29.5. Clearly, mobile broadband in Sweden is not a profitable service yet. Sweden_revenue_decreaseSource: Swedish Post and Telecom Agency (PTS)

As the accompanying chart demonstrates, most of this traffic is being carried by 3′s network. The average monthly data  per subscription  has increased to 1.8 GB and there was a great variation between the various operators. In particular, 3 is carrying the bulk of this traffic with its average monthly data traffic per subscription as high as 4.5 GB.

Sweden_traffic_increase_operatorsSource: Swedish Post and Telecom Agency (PTS)

Btw, 3 Sweden is the only operator that I have come across that offers different price levels based on the speed of the modem. Three different price levels corresponding to maximum download speeds of 2Mbps, 6Mbps and 10Mbps are being offered – presumably, the choice of modem restricts the maximum download speed. It is an interesting twist to mobile broadband pricing where the predominant model is based on monthly usage quotas and throttling of user traffic once the quota is exceeded.

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USB Dongle – Fashion Accessory?

You know USB dongles have become mainstream when operators start selling different color skins to go with them. H3G in Sweden (also called Tre) is positioning their mobile broadband as the “most stylish broadband” in addition to being the fastest!

 

Sign up for 3 mobile broadband for 18 months and receive any skin at no extra cost” according to their offer at 3′s website. What will they think of next?

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Deeper Dive into Mobile Broadband Growth in Sweden

I have written about the explosive mobile broadband growth in Austria – Sweden is yet another country where mobile broadband growth is rivaling fixed broadband options. This is not very surprising given how competitive mobile broadband is being priced in Sweden compared to that of fixed broadband. Sweden’s National Post and Telecom Agency (PTS) publishes an annual report on the state of the Swedish Telecommunications Market. The 2007 report has several interesting data about the state of the mobile broadband in Sweden called “mobile Internet” in the report.

Clearly, 2007 was the year for mobile broadband in Sweden. During 2007 the number of mobile subscriptions via data plug-in cards or USB modems increased from 92,000 to 376,000 representing a growth rate of around 309%. Apparently, this frenetic pace of growth has shown no signs of slowing down in 2008 as well. USB modems for mobile Internet have for instance been at the top of the sales figures in both Telia Sonera and (3)’s shops during the first months of 2008. This rapid growth in mobile broadband subscriptions has been exceeded by a even more faster rate of growth in mobile data traffic as the accompanying figure illustrates -  total mobile data traffic increased by over 1000% during 2007  (from 203 Tbytes to 2,191 Tbytes). This follows a similar pattern in all the countries where mobile broadband is showing explosive growth – traffic increases at a rate significantly greater than the revenue from mobile broadband subscribers, given that the latter pay a flat fixed fee for their subscription. As a matter of fact, total revenues from mobile data traffic in Sweden increased by 60% – compare that to 1000% growth in mobile data traffic!

Telia Sonera with 39% of mobile broadband subscriptions is the market leader. The next largest is Tele2 (25%) followed by 3 (19%) and Telenor (15%). The smallest is Nordisk Mobiltelefon (who is actually a CDMA operator operating in the 450Mhz band) with less than 3% of the market.

What’s the outlook for mobile broadband now? 

At the end of 2007, roughly 78% of Swedish households had some kind of Internet access with 62% of the households having broadband connectivity. We can fully expect that the 16% of the households with dial-up access will choose some flavor of broadband in the near future.  Mobile broadband is perfectly placed to win over this customer segment – in addition to the 22% of households without any Internet access. In fact, mobile broadband jumped to 12% of all broadband subscriptions in 2007 from a 4% base in 2006. In addition to an extremely competitive price – flat-rate mobile broadband connections with speeds of up to 7.2Mbps are available for SEK199 (US$30.80)) a month, comparable to the price of a 500Kbps fixed-broadband subscription, around 1 million of Sweden’s 4.5 million households are outside the reach of ADSL. Many Swedes are also opting for a mobile broadband connection when they migrate to holiday homes in the countryside during the summer. With no fixed broadband offerings to protect, it is a reasonable bet that (3) will go after this segment aggressively similar to its approach in the other countries in which it operates.

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Filed under fixed broadband, mobile broadband, mobile Internet