Operators face setback as cheap Wi-Fi-only tablets hit market

editor's corner

When Amazon releases its cheap Kindle Fire for $200 and Barnes & Noble introduces the Nook Tablet for $250 next week, mobile operators will face another setback when it comes to trying to capitalize on the tablet market.

That's because both tablets--which are expected to give the iPad some competition and spur tablet sales overall--will be Wi-Fi only, further cementing the idea that mobile operators aren't giving people incentives to use broadband over their networks in the tablet realm.

Amazon and Barnes & Noble are more interested in selling their content services than in partnering with mobile operators. Amazon is subsidizing 3G services for the Kindle because it wants people to be able to buy books anywhere they want. Now with the Kindle Fire, they want people to consume videos and other heavy data services--services that are best consumed via Wi-Fi and not with metered mobile broadband.

It's pretty well known now that consumers are reticent to add yet another data plan on the tablet side, and operators haven't addressed those concerns. As Amazon and Barnes & Noble usher in cheap tablets, their primary concern is dominating the relationship with customers, not partnering with mobile operators like Amazon has done in the past with the Kindle.  

It's been argued for some time now that operators need to make tablet data plans more attractive by developing bundled offerings since customers are loathe to add yet another data plan.

But perhaps it's also a matter of striking wholesale deals that offer benefits for an Amazon or Barnes & Noble when it comes to their mission of selling more content. That could come in the form of guaranteed bandwidth availability or truly unlimited data pertaining to their most valued content, for instance. If a wholesaler sees these types of arrangements as a way to boost sales of their own content, it would be willing to subsidize the service.

As it stands now, Wi-Fi offers that truly unlimited experience, and while it's not ubiquitous, it's in a heck of a lot of places. Operators need to make mobile broadband a compelling feature for both subscribers and wholesalers.--Lynnette

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