Technology | Media | Telecommunications

Monday, August 24, 2009

Mobile Data Services Still Priced Too High

A recent survey by ABI Research within the U.S. market, of 1000 consumers, defined the current attitudes about cellular modems. It includes one significant result that should grab the attention of mobile phone service operators.

The high-priced subscription still limits increased service adoption.

Cellular modems enable laptop computers -- and devices such as netbooks, e-readers, PNDs and digital cameras -- to access the Internet. Typical cellular modem users currently pay $50-$60/month for mobile data services from service providers.

Respondents who don't currently own cellular modems but are interested in them, however, place a significantly lower value -- somewhere between less than $10 and $30/month -- on that mobile data service.

"Over 47 percent of U.S. survey respondents had at least some interest in cellular modems and their willingness to pay for mobile data service is at half of current market prices," notes senior analyst Jeff Orr.

In the U.S. at least, consumers want a mobile data service costing no more than their home broadband access.

Part of the reason for this is that developed telecommunications markets are more likely to add a cellular modem in addition to their fixed Internet access rather than as a replacement.

Another consideration is that high-speed mobile broadband networks are not ubiquitous -- only certain regions and locations (those offering newer 3G or 4G data networks) presently have coverage, but that may improve over time.

While subscription plan cost is predicted to fall, there is a trade-off with the still less-than-perfect capacity of the networks.

"Could operators say we'll give you mobile broadband performance for $39 a month?" Orr asks. "Yes; but will they be able to deliver on that promise?" We'll have to wait and see.