Friday, April 15, 2011

Analysys Mason: Will LTE be a Threat to Fixed Broadband Providers?

Rupert Wood (picture), Principal Analyst, Analysys Mason says that "Just when European fixed operators thought they had seen off the threat of fixed-to-mobile broadband substitution, some, mainly in Nordic markets, are encountering new mobile services that are genuinely substitutive again .. mobile network operators (MNOs) with 4G, awash with spare capacity, are now marketing ‘mega buckets’ of data (up to 30GB per month - see pricing below) offering speeds of ‘up to 100Mbit/s’ .. If we assume for the time being that realistic speeds are about one seventh the theoretical maximum, then these look like real equivalents of an ADSL2+ service"

See "4G mega buckets: enough to cause European fixed broadband operators a few sleepless nights" - here.

"However, in markets where fixed broadband can and does already address a high proportion of the population, the threat will not be strong enough to alter the balance of fixed and mobile data in the long term as long as fixed players respond appropriately .. [one reason being that] Data allowances of 20–30GB may not be enough in the long term to compete where mean Internet data consumption on fixed is already about 20GB and growing at a rate of about 50–60% per year. Moreover, past evidence shows that many MNOs trimmed mobile broadband allowances on 3.5G when networks started to fill. Providing too many mega buckets will hurt the MNO"

The chart compares the retail price per GB of selected top-end European 4G services, with top-end 3G services in Denmark and the larger European markets of France, Spain and the UK, where 4G is not available.

In Denmark, where 4G services are available from one MNO, prices for 3G mobile broadband packages have fallen fast and now look starkly different from where they were a year ago and from those of most 3G players in countries with no 4G

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