Few seem to doubt these days that mobile solutions have become functional substitutes for fixed line network products, with voice service being the obvious example. The new issue, especially as fourth generation networks are deployed and marketed, is the potential amount of potential product substitution for fixed line broadband.
The key issue, for many fixed network competitors, is how much product substitution will occur, and how fast.
There seems little opposition to the notion that some significant potential for product substitution does exist, and not only in emerging markets where mobile broadband “will be broadband” much as “mobile voice is voice” and as the mobile phone is the primary way people in many markets will use the Internet.
Surveys by U.K. regulator Ofcom might be illustrative. Of all U.K. households in which at least one person is using mobile broadband services, 44 percent do not have a land-line broadband connection.
Since the first quarter of 2009 the number of U.K. households using both fixed and mobile broadband has been stable, at just under one in ten households, while those using solely fixed broadband increased by two percentage points to 58 percent in the first quarter of 2011
Seven percent of U.K. households have only a mobile connection. Ofcom report
This mobile-only proportion is even larger among younger age groups and those who belong to lower socio-economic groups, the Ofcom report suggests.
Unsurprisingly, customers who rent their properties are also far more likely to use only a mobile broadband connection compared with those who own their own property.
This data demonstrates that substitution is a reality. There is no doubt that for a significant share of the U.K. population, mobile broadband takes the place of a land-line connection to the Internet.
“We expect this group to grow steadily over the next four years as mobile network performance improves and prices remain competitive with land-line services,” says Declan Lonergan, Yankee Group analyst.
That doesn’t mean “most” consumers will do so; only that for many customer segments, this does make sense.
Friday, January 13, 2012
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