Thursday, January 12, 2012

LTE Will Mean Higher Mobile Broadband Substitution

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.

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.

Some would say the emergence of the mobile personal hotspot is a major enabler, as well, allowing a single mobile connection to serve multiple devices, instead of “one PC.”

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.

No comments:

U.S. Cable Operators Will Lose Home Broadband Share, But How Much, and to Whom?

Comcast says it will lose about 100,000 home broadband accounts in the fourth quarter of 2024, a troublesome statistic given that service’s...