Is the boom in mobile broadband over?

Many companies have built their reputations and fortunes on the exploding demand for mobile broadband. One vendor, Ericsson, recently reported in its fourth-quarter results that demand for the service had significantly boosted its equipment sales during the second half of 2010.

Certainly, mobile broadband grew substantially last year. Cisco recently estimated that global mobile data traffic grew 2.6-fold in 2010, nearly tripling for the third year in a row.

Cisco's forecasters are also extremely bullish for the future predicting that mobile data traffic will experience an astonishing compound annual growth rate of 92 per cent from 2010 to 2015. This equates to a 26-fold increase over this period.

Heady figures indeed. But can this seemingly insatiable desire continue? Not for long, if you accept the findings of another new study conducted by the market research firm Analysys Mason, that has seemingly identified some worrying trends.

Having surveyed 6,000 consumers across Europe and the United States, the company found that over 70 per cent agreed that mobile broadband was slower, less reliable and more expensive than fixed broadband. Of more concern was that around the same number said they were not interested in using mobile broadband--an increase from when they were questioned in 2009.

Commenting on this market research, Tom Rebbeck, research director at Analysys Mason, said that about 13 per cent of mobile broadband subscribers were already planning to drop the service. "By comparison, less than 1 per cent of subscribers intend to abandon their mobile voice service," he said.

Customers dropping mobile broadband? This is not on the agenda of many vendors or mobile operators.

Rebbeck maintains that attracting new subscribers to mobile broadband should not be attempted by reducing tariffs or improving the network, with both being expensive to implement.

"The solution is simply to focus on mobile broadband's unique benefit in comparison with fixed broadband: the ability to connect to the Internet while on the move," said Rebbeck.

The view from Analysys Mason is that the growing idea of mobile broadband being sold as an alternative to fixed broadband is likely to fail. Where consumers have a choice, then the company claims that mobile broadband shouldn't be sold as the primary means of access, but as a complementary service.

What should also be worrying the cellular industry is the growing enthusiasm for WiFi. Whilst relegated to the periphery of mainstream wireless activities, WiFi has surged back as handsets and tablets enabled with the technology achieve growing acceptance.

This might explain why mobile operators are rather hurriedly planning or deploying the hotspot technology in an effort to stop their data subscribers slipping away.--Paul