Friday, 31 July 2009

Mobile broadband starting to take off in France?

I was over in The Hague this week and the message from the Netherlands is that mobile broadband is really starting to take off after a slow start. I'm glad to hear it because my forecast in the Mobile broadband in Europe: forecasts and analysis 2009–2014 report from Analysys Mason was that the market would see rapid growth this year. It's nice to be right.

Another market that I'm expecting better things from is France. Very low MBB penetration so far, but there is some reason to be cheerful based on Orange's recent KPIs. Their dongle subs in France increased 45% in the first half of 2009 to almost 800k subscribers. During the first half on 2009 they added almost as many connections as during the whole of 2008. All this means France is just about on target to hit the 93% growth rate that I predicted for 2009 as a whole. It may even exceed it!

Monday, 27 July 2009

Telenor/Huawei deal sets the trend for USB modem supply contracts

Apologies for the radio silence, I've been on vacation for the last 2 weeks. I should get around to reviewing everything that's happened in my absence.

In the meantime, what grabbed my attention was the announcement that Telenor would be doing a global deal with Huawei to provide 1.3 million modems to its opcos in Norway, Sweden, Denmark, Hungary, Serbia, Montenegro, Russia, Ukraine, Pakistan, Bangladesh, Thailand and Malaysia over the next year.

By my estimates, in that footprint during the next 12 months something like 8-9 million modems will be sold across all operators. With Telenor taking maybe a quarter of the sales it looks like Telenor is committing to Huawei as its main supplier, leaving other vendors to fish around for scraps here and there.

Given how difficult it is to differentiate USB modems it's hardly surprising that an operator would choose to strike such a deal. Prices will be lower and there's little downside from supporting almost exclusively Huawei devices rather a range from multiple manufacturers. I would expect other operators to follow suit and put all their (identical) eggs in one (discounted) basket.

Friday, 10 July 2009

A toll bridge over the digital divide

I was chatting with Nick Wood over at Total Telecom today about BT proposing extending the 50p levy to mobile. As discussed in last blog post I don't think this is great idea as the poorest in society rely solely on mobile for their connectivity. Charging a telecoms poll tax so that rural areas can be provisioned with some form of broadband is swapping one form of digital divide for another.

Actually there's a more general flaw with the 50p charge. It's putting a barrier in the way of people bridging the digital divide. The UK government is seeking to bridge the digital divide with a toll bridge. It's actually adding a barrier to digital inclusion (albeit a small one). Others have advocated using general taxation. I think there's some logic to this.

Monday, 6 July 2009

Extend the UK 50p/line levy to mobile? Ridiculous.

Houston Spencer, Alcatel-Lucent's vice president of marketing and solutions for Northern Europe raised an interesting issue (as reported on Total Telecom) about the GBP0.50/line levy recently announced in the Digital Britain report and intended to fund the roll-out of broadband to underserved areas. Why should this not also apply to mobile? After all, surely wireless technologies will play a critical part in bridging the digital divide, particularly in rural areas. So why shouldn't mobile operators also stump up for this? Particularly if the joint funded mobile roll-out is subsequently jointly owned and utilised. This surely would make it much more economically viable to provide services.

The answer is, of course, that such a levy would be passed on immediately to consumers and in many cases to consumers who couldn't afford it. The social consequences (and the ensuing political flak) would be unacceptable. As of the end of 2008 (according to Analysys Mason's Telecoms Market Matrix) UK monthly prepaid ARPU was GBP10/month. Putting a GBP0.50/month tax onto that line would effectively add 5% to costs. And that's for the average user. Many people spend a lot less on their prepaid phone but rely on it just as much. For the highly price sensitive, mobile, not fixed line, is the most cost effective option with zero fixed cost of ownership. Pushing up the monthly cost of highly price sensitive users by 10-20% could effectively widen the digital divide by depriving these people of access to any form of communications; exactly the reverse of what the levy was aimed at achieving.

Even if such charges were applied only to mobile broadband (and how would one define that anyway when it's possible to use a handset as a modem?) it would also be counterproductive. MBB, thanks to the availability of prepay variants, is much more affordable for price sensitive users than fixed line. Start enforcing higher charges there and you also risk undoing all the good work that MBB has done providing affordable broadband to the masses.

Wednesday, 1 July 2009

That didn't take long

As predicted in the last post, 3's competitors didn't take long to respond to their £1.25/MB international roaming rate.

Vodafone announced that a new data tariff will apply from today across Europe which will cost £9.99/day for 50MB, i.e. £0.20/MB.

Obviously the minimum charge is a bit of a pain, but I'd argue given the usual usage patterns of mobile broadband it's more price efficient for users than the 3 plan. How often do you only use 1MB during a session, let alone a day? If you've taken your laptop, you're going to use it and you only need to generate 8MB of data to make it worthwhile getting the large plan. Almost every session would do that.

Outside Europe the charge would be a slightly less palatable £29.99 for 50MB.

3 UK roaming comparison is misleading

On the 29th June (two days ago) 3 put out a press release claiming that on the 30th June (yesterday) it would be launching the cheapest roaming rates in the UK. This included, at £1.25/MB the cheapest MBB roaming rates. They were even kind enough to provide a handy-to-use chart, see below:

This is, at best, misleading. As of the 1st July (today) ALL mobile operators in the EU will be forced to abide by the EU roaming regulations as determined in September 2008. In the case of data rates the maximum chargeable rate established by that regulation is EUR1/MB, which is substantially below what 3 is charging. So we can anticipate that all of 3's competitors will be imminently slashing their roaming rates.

CLARIFICATION: the EUR1/MB is a wholesale rate, not a retail rate. For all the other services covered by the new regulations, a retail rate is mandated, whereas for data it's only wholesale. Nevertheless we'd expect to see substantially lower rates from the competition imminently as a result of the lower wholesale rate. If not, surely there's a requirement to mandate a retail rate for that too.

Of course all of this makes little difference to the average consumer for whom all of the prices quoted, including the new EU mandates maximum of EUR1/MB is still prohibitively expensive. Average Joe still won't be taking his dongle with him on holiday. Not if he has any sense.

3 Austria MBB subscribers seem happy (wait until they see "BrĂ¼no" on BitTorrent)

I spotted a news story today about 3 Austria's mobile broadband customers being the happiest in the land.

"38 percent of questioned 3 Austria customers were 'very happy' with their mobile broadband services, with a further 33 percent 'happy' with their service. Over 50 percent of customers actively recommend the company's mobile broadband service to their friends and relatives, with 7 in 10 customers saying their expectations had been met by the company."

These approval rates seem pretty good for mobile broadband. I guess that's what happens when you have 94% population coverage, 7.2Mbit/s and get 15GB of data for only EUR15/month. No wonder mobile broadband penetration is running at 12% at the end of 2008, comfortably the highest in Europe (and probably the world) according to Analysys Mason's report Mobile broadband in Europe: forecasts and analysis 2009–2014.