Mobile broadband prices to jump

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Consumers could soon see the end of ‘cheap’ mobile broadband tariffs, according to broadband comparison website Broadband Genie.

Analysts predict changes in mobile broadband pricing within the next year.

Broadband Genie said casual users could  benefit from upcoming changes as mobile broadband providers look set to adopt a ‘pay for what you use’ approach.

Two new reports from analysts Omnitele and Strand Consult conclude the cost of rolling out and maintaining mobile broadband technology means the current business model is unsustainable.

Broadband Genie editor Chris Marling said: “UK broadband providers are no mugs; prices are currently low as companies fight for numbers in a growing market, but they realise the situation isn’t sustainable and will be looking to change packages and turn a profit in the near future.

“Raising prices for heavy users, who are typically early adopters to new technology, makes financial sense. This will leave more leeway in prices to attract those casual, mainstream users who may still need some convincing.”

He went on: “While mobile broadband is becoming more and more popular, defying the credit crunch against the odds, there has been a recent downturn in voice revenues – and so lower profits for mobile providers. As this trend is likely to continue, it could well be bad news for your mobile broadband bills as early as next year.”

Antonios Drossos, vice president of Omnitele’s business consulting unit, said that “controlling busy hour traffic of heavy users” and “adjusting retail pricing” were two of the most straightforward options networks would take.

Strand Consult chief executive John Strand said: “Part of the service that is free on fixed-line home internet will cost money. We expect mobile broadband operators will launch mobile broadband products which cannot be used with VoIP and peer-to-peer file downloading services. However, the connection will be cheap and far below what we pay for home broadband.”

Marling added: “This could then have implications for fixed-line broadband providers, who may also have to rethink how they price their packages. Those customers who download a lot of content will probably have to pay for it, while less bandwidth intensive consumers may see prices fall.”

Strand concluded: “You will see this pricing change in a number of European countries this year. I expect it will happen in the UK by Q1 2010. These price developments on the mobile broadband market will put pressure on home broadband providers, as a lot of customers will disregard fixed-line for a mobile solution.”

 

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