Sunday, June 8, 2014

[Disruptive Analysis]: "Fast Lanes" won't be Worth Much

A new study by Dean Bubley [pictured], Founder, Disruptive Analysis finds that "New Non-Neutral Mobile Broadband Business Models will generate $25bn in 2019 - just 6% of total mobile Internet/data access revenue, excluding those plans that just use outright blocking/throttling, and those with just some form of zero-rating of apps/content - the latter will also be important, at >1.5bn users getting 'something for free'".

The study looks into the "viability and potential scale of over 25 forms of "non-neutral" mobile broadband & Internet business models, such as "sponsored data", "zero-rated" apps and differential network QoS or "fast lanes" .. mobile operators are hoping that less-rigid "neutrality" rules will allow application-based charging for end-users, or perhaps new revenues from content companies paying for traffic on behalf of users (sponsored data) or for extra QoS. While some countries allow - or even mandate - blocking of certain apps, that is not generally an option in Europe, North America or most other advanced markets"

  • Conversely, so-called "fast lanes" for mobile video or applications are complex to achieve, cause huge controversy and - in the final analysis - likely won't be worth much anyway.
  • Zero-rating of certain applications is interesting - some say it distorts competition and encourages mobile operators to reduce "general" open-Internet quotas, in favour of revenue-share deals with content players, or gives Facebook or Google too much of a lock over new Internet users. Yet it also does allow access to Wikipedia or educational material for free, and in many cases is just a promotional tool rather than a strategic shift. Disruptive Analysis feels it should be watched closely, but is not yet a major Neutrality risk (although the Chilean regulators recently thought differently, and banned it). 

See "Only 6% of Mobile Broadband revenues from "non-neutral" access by 2019" - here.

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