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.
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