Technology | Media | Telecommunications

Thursday, August 19, 2010

Broadband Infrastructure New Investment Avoidance

Some forward-looking mobile phone service providers are attempting to attract new smartphone customers with attractive feature-rich and truly economical offerings.

In a cross-country comparison of mobile data pricing, ABI Research found The United Kingdom, France and Indonesia to have among the lowest prices for mobile broadband plans.

In Indonesia, a 4GB data package for the BlackBerry Internet Service (BIS) costs as low as $17 monthly. Indonesia and other developing countries are driving mobile Internet usage through the use of low-cost prepaid mobile broadband and Internet plans, driven by the popularity of BlackBerry and other smartphones.

In contrast, mobile network operators in developed markets are struggling to cope with the new demand that exponential data usage increases have placed on their networks. Walled-garden access to content was the prior method to ensure that smartphone data usage was minimized. But, not anymore.

Today, apparently mobile service providers are now utilizing new price-centric approaches to drive their broadband infrastructure investment avoidance strategies.

"AT&T's adoption of tiered data pricing is already seen in many European markets, and will signal the end of unlimited data bundles," says ABI Research analyst Bhavya Khanna. This latest approach should help to limit smartphone subscriber service usage -- and therefore reduce network resource demands.

Other countries including Italy and the Philippines have experimented with pricing according to time rather than data consumption, allowing users a fixed number of hours of connectivity every month.

Since data usage will continue to grow, regardless of the ongoing attempts to curtail it, ABI believes that operators will need to introduce innovative data pricing and manage their bandwidth in order to deliver an "enjoyable" user experience.

There currently seems to be little concern, by those using this approach, that customers may resist these pricing changes and churn to other service providers that actually still encourage smartphone usage.