Regulators eye mobile data speeds

Ovum
Telecom regulators are now seeking to monitor the reliability and speed of mobile broadband, with the US the latest country to launch a monitoring scheme for mobile broadband performance.
 
Although most countries have launched their monitoring schemes relatively recently, at the moment the majority cover only fixed broadband. However, the increasing uptake of 4G connections is prompting change, as mobile broadband becomes a substitute for fixed connections.
 
The success of monitoring initiatives is difficult to assess at present, but operators should expect them to become more widespread; they should co-operate with regulators and ensure they offer their services at the promised quality.
 
Monitoring is likely to encourage operators to deliver a higher-quality experience
As Ovum noted in its report Broadband performance monitoring schemes, regulators are increasingly seeking to measure the performance of broadband connections. They are developing monitoring schemes with regular measurements, and increasing their focus on consumer protection.
 
This subject has long been high on the agendas of some regulators (e.g. European NRAs), and has more recently become a key issue for regulators in other regions.
 
Ovum’s research has found substantial differences between countries in the development of methodologies and parameters to measure. Download throughput is the variable most commonly associated with broadband performance, and it receives significant attention from both regulators and ISPs (when marketing Internet offers). Although consistency across countries is desirable because it enables easy cross-country comparisons, its absence should not be a cause for concern. Broadband performances may vary between countries because of specific factors that make it difficult to carry out meaningful comparisons between different countries.
 
The success of monitoring schemes is difficult to gauge at this point. Although Ofcom in the UK has been monitoring Internet speeds since 2008, it is hard to directly attribute the increase in average actual speeds to the program. The FCC in the US started its scheme in 2011, and has already found noteworthy changes in its second report.
 
 
Whether or not they are responding to the monitoring schemes, ISPs are acting positively in many countries, and they should continue to do so. Competing on quality and reliability will eventually put them in a strong position in the market, and customers will likely be willing to pay more for fast connections of good quality. As consumers become more aware of broadband performance measurement schemes – and increasingly get involved – it will be even more important for ISPs to offer connections that match the performance levels they advertise.
 
Brazil is leading the way in measuring mobile broadband, but other countries are following suit
 
Although performance monitoring has so far generally related to fixed broadband, some NRAs have also launched schemes to monitor mobile broadband. In Brazil, the regulator, Anatel, started publishing the results of its measurements in August 2013, and now does so on a monthly basis. Quality-of-service (QoS) obligations are in place for MNOs, which must achieve minimum performance targets every month.
 
Other countries are following Brazil’s example, although they publish their results less frequently and do not relate them to minimum QoS requirements. The Italian regulator, AGCOM, published its first results in October 2013; ARCEP in France also has a scheme already up and running; and Ofcom in the UK (the first regulator to launch a broadband monitoring program) will follow suit in the coming months. The FCC in the US recently launched apps to measure mobile broadband performance, and has already disclosed data on the number of downloads and tests carried out (30,000 downloads and 40,000 tests within the first week).
 
The next country to follow could be Australia, where a broadband performance scheme is being developed and the regulator ACCC is considering whether to include mobile broadband.
 
As consumers adopt 4G more widely, their expectations are also raised
Although 3G connectivity qualifies as broadband due to its typical download speeds even in cases of congestion, speed has hardly been its defining characteristic. Consumers generally do not include speed among the reasons they value their 3G mobile connections.
 
However, things are likely to change with the increasing uptake of LTE, which promises (and generally delivers) much higher speeds for both upload and download. Customers are willing to pay more for faster connections that allow them to engage in bandwidth-hungry activities such as watching and sharing videos and uploading high-quality pictures to social networks.
 
 
The arrival of 4G is creating the expectation of faster, more reliable mobile broadband, which may increasingly become a substitute for fixed connections. In this respect, it is not surprising that 57.5% of the speed tests carried out through the FCC’s app were by 4G users – proportionally, subscribers of LTE connections appear to care more about speed than 3G users. (There are approximately 102 million 3G subscriptions in the US, as opposed to approximately 60 million LTE connections.)
 
Monitoring mobile broadband performance is still important even where speed is not the main factor. Mobile broadband plays a key role in getting people online, particularly in rural areas. The Brazilian regulator, Anatel, has treated fixed and mobile broadband in the same way since the start of its monitoring scheme. Regulators in other countries should consider including mobile broadband in their measurements in the medium or long term, with particular attention to LTE.
 
Lucia Schiavoni is an analyst for policy and regulation at Ovum. For more information, visit www.ovum.com/

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