Mobile Broadband Supplemental, But High Risk of Substitution

A huge explosion in mobile broadband use in Europe over the next five years largely will be driven by consumers, and largely will complement, not supplant, wired broadband connections, predict researchers at Analysys Mason.

That said, a separate forecast by Informa Telecoms & Media suggests the potential for broadband substitution will remain high.

Analysys Mason projects148 million mobile broadband connections in Europe by 2014, when they will account for almost half of all broadband connections in the region.

The potential for fixed-line voice substitution also will remain high. About 40 percent of total mobile traffic was generated in the home environment in 2007, says Informa Telecoms & Media.

By 2013 it is expected to reach 58 percent, with about eight percent of total mobile traffic offloaded to fixed broadband. In 2008, the home environment likewise represented more than 43 percent of total mobile data traffic and will climb to 60 percent by 2013.

That's the danger for fixed services providers, particularly in single-person households, households of non-related persons and households where every person in the household above a certain age has a mobile.

Mobile use at home will represent about 40 percent of total mobile usage, while use at work will represent 30 percent of usage, with nine percent of calls initiated while users are moving. About 21 percent of calls will be generated from other public environments.

"In the same way that voice traffic has moved from old fixed line telephony service PSTN to mobile, there is reason to believe that a significant percentage of Internet traffic generation will move away from fixed personal computers to mobile devices including mobile handsets, mobile Internet devices (MIDs) and connected notebooks," says Malik Saadi, Informa principal analyst.

As more casual users adopt mobile broadband, they typically will do so as a complement to tethered broadband, usually opting for prepaid subscriptions rather than monthly contracts, Analysys Mason forecasts. Prepaid subscriptions will account for 59 percent of mobile broadband connections in 2014, up from eight percent in 2008.

New customers will tend to behave differently from early adopters and users who have substituted wireless for wired connections, many observers believe. Most significantly, use will be casual. So, at some point, continued growth of mobile broadband in the U.S. market likewise will require charging mechanisms better suited to casual users, who will not be inclined to add substantial fixed-fee subscriptions when their anticipated usage is relatively light.