Is Mobile Broadband a Commodity?

Most industry observers tend to think and behave as though "voice" were a commodity, and there is some truth to the notion, at least on the wholesale, carrier-to-carrier or carrier-to-enterprise level. I would dispute the notion that voice, in all its permutations, actually fits the definition of a commodity, but for the moment let's look at mobile broadband.

Is mobile broadband a commodity? Can it replace a fixed broadband connection. As this chart suggests, the answer largely is "no." A mobile service easily can displace a single consumer voice line or simple Internet applications such as email. But it isn't so clear email access is what people generally mean when thinking about mobile broadband.

At the other extreme, high-quality linear entertainment video is virtually impossible to replicate in the mobile domain, so IPTV, for example, has no direction equivalent in the wireless domain. Other applications are somewhere between "mostly" substitutable and "not" substitutable.

The point is that a product probably isn't a full "commodity" if full substitution is not possible, or is possible, but without fully interchangeable value. So far, mobile broadband does not seem to be a "commodity" fully capable of replacing a fixed broadband line.

There are many reasons, including vastly different speeds, usage caps and pricing. Then there is the demographic element. It is easier to consider substitution when a single-user household is concerned, hardest when multi-member families are concerned.

The value of a fixed broadband connection grows with the degree of bandwidth sharing and total number of devices to be supported. One fixed broadband connection might make more sense than five mobile broadband connections, for example.

The other angle is that linear multi-channel entertainment video is just a discrete application delivered over a fixed broadband connection, and there is as of yet no mobile substitute. So despite outward appearances, mobile and fixed broadband are not fully-exchangeable substitutes, and hence not true commodities.