Technology | Media | Telecommunications

Tuesday, February 03, 2009

Europeans Embracing Mobile Broadband

According to a market study by IDC, mobile broadband has grown rapidly in popularity among European consumers during the past 18 months. This uptake has been catalyzed by four main factors -- the upgrading of 3G networks with HSPA, the availability of small USB connection devices, a fall in the price of subscriptions, and a rise in consumer penetration of portable PCs.

"Mobile broadband presents a big opportunity, both now and for several years to come," said John Delaney, IDC's European director of consumer mobile research.

But although the service is simple in concept, its role in the consumer services market is complex. Mobility is only one among a variety of reasons why consumers like mobile broadband. Success in the market will depend critically on a clear understanding of how mobile broadband should be positioned in the spectrum of mobile and Internet services.

Mobile broadband is a new source of revenue for mobile operators and improves the use of 3G networks -- unlike other new mobile services such as TV and gaming, it relates directly to a telcos' core business.

"However, it also substitutes for fixed-line broadband in some circumstances, cannibalizing existing revenues," said Delaney. "As such, it is important for operators with both fixed and mobile networks to understand what factors are driving demand for mobile broadband, what is likely to happen to those factors over the next few years, and what strategies they should adopt to take maximum advantage of the opportunity."

Other findings in the IDC market study include:

- European operators sorely need new service revenues, and mobile broadband promises to satisfy that need by generating revenue that is new and entirely incremental to existing revenue streams.

- The combination of a strongly growing addressable market with prices at fixed-broadband levels, and in increasingly flexible packages, will ensure that consumer demand for mobile broadband remains strong for some time to come.

- The global recession, however, could slow down the penetration of portable PCs and therefore the addressable market for mobile broadband. It may also make consumers more reluctant to commit to a new service contract.