How attractive is mobile broadband to the Internet user?
Parks Associates released a report that concluded mobile broadband access services have failed to capture the interest of average consumers worldwide because of the premium prices charged for the services. Only Internet users in the U.K. are willing to pay a premium over the cost of fixed connections for mobile broadband access. In the U.S., consumers are willing to pay only a 6 percent premium for a basic mobile broadband service. Drop the price to $35 a month, a price that is significantly lower than what is available on the market, and only 19 percent of U.S. Internet users are interested in mobile broadband service. The firm said that at this price point, the total worldwide addressable market is less than 100 million subscribers.
What does this mean for Sprint Nextel's WiMAX service? It is highly likely that the operator will be offering WiMAX services in the $30 range, but I predict there will be significant pent-up demand if a variety of devices come to market at the right price. Remember Nextel's trials of Flash-OFDM in Raleigh, NC? The operator offered high-speed wireless services for $30 a month. Despite knowing that the service was a six-month trial, consumers were annoyed when it ended.
I suspect that lack of understanding about the potential of mobile broadband came into play in this survey--especially all of the marketing surrounding high-speed data services via a laptop has to do with the road warrior. Interestingly, Don Stroberg, vice president of 4G strategy, planning and development with Sprint, said in a recent interview that early market trials have shown that 80 percent-plus of users consumed the service in a truly mobile or portable fashion. Users bought the service with mobility usage in mind, but also realized they could cut the Internet cord at home. That means WiMAX could potentially usurp both WiFi hotspots and DSL. -Lynnette