The growth of
mobile computing has certainly been driven by the competitive
nature of mobile broadband access but it appears that as telecoms
operators feel the pinch from the credit crunch, the days of cheap
mobile broadband could be over.
According to reports by Swedish media outlet Dagens Industri,
Telia, the Swedish incumbent fixed and mobile operator is planning
to increase its mobile broadband subscription prices.
Commenting on the ramifications of the development if accurate,
telecoms, IT and media industries research firm Analysys Mason said
that that the move highlights the
operator’s need to ensure a positive return on its investments
and that this could be a sign that Telia is acknowledging that
current pricing models are making this ambition difficult.
“Swedish MNOs seem to have gone slightly further than many of their
European counterparts,” commented James Allen, Partner at Analysys
Mason. “They have introduced unlimited usage subscription packages
at low prices, thus essentially positioning mobile broadband as a
substitute for fixed broadband. These aggressively priced offerings
have surely succeeded in driving growth in the market – during
2007, the number of mobile broadband subscribers increased from
92,000 to almost 376, 000 – but there is a disadvantage to this
approach. As a Telia representative put it: ‘We need to find new
models instead of fixed monthly fees, otherwise it will be
difficult to run this business’,” Allen added.
It may well be the case that Telia and other operators around
Europe will be inclined to investigate offering
new mobile broadband tariffs related more to usage than peak
speed. Such new pricing models will inevitably be dearer and less
flexible from an end user perspective and may make firms curtail
the amount of business professionals they empower with mobile
broadband accounts.
Offering a further explanation for the move, Rupert Wood,
Principal Analyst at Analysys Mason, suggested that that even
though mobile broadband was a driver of growth, many MNOs were
generally offering mobile broadband services for less than their
fully allocated cost.
“It may make sense to fill networks with inexpensive mobile data
traffic rather than leave them empty, but there will clearly be a
point where the economics change. Telia seems to have foreseen this
point and is taking steps to protect its investments. The reaction
from consumers and competitors will be a critical factor in whether
it succeeds,” he concluded.
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