Questions & Answers

Questions & Answers

Demand for mobile broadband is predicted to go ballistic over the next six months. Based on your sales and marketing pushes, what can you see happening, and why? Are mobile operators overcoming the fears of end users in terms of bill shock, or are the handsets available right now and the apps on them the big draw for consumers and business users?

   

Andy Tow, Avenir Telecom managing director:

I think the big draw for business users, which also happens to be the way to avoid bill shock, is to roll out mobile broadband as part of an integrated, multi platform comms solution.

Resellers need to provide broadband, full stop, including both mobile and fixed line, or provide mobile computing, including both the laptop and hardware and the dongle and connection. Joined up solutions like these put mobile broadband in its place as one of a set of comms options whose value to the end user grows when used in conjunction with others.

The beauty of the marketing push around mobile broadband is that although operators, manufacturers and resellers are selling different products, they’re all selling the same concept; internet on the move. It’s a concept both business and consumer markets can’t get enough of.

If bill shock is circumnavigated, there’s always another post purchase shock which is the classic, “I’ve got it, but now I don’t know what to do with it” scenario, that comes with a lot of technologies. And you’re right, this is where apps will drive mobile broadband forwards.

Andy Tow, Avenir Telecom managing director
Andy Tow, Avenir Telecom managing director
 
Facebook is a good example as end-users get a lot of value out of using Facebook on the move, via mobile broadband, as opposed to having to wait to get back home or to the office to log on. The same can be said for many business apps, ranging from industry-specific billing and procurement applications right across to the very neat new iPhone edition of LinkedIn.
 

Tim Deluca-Smith, WDSGlobal vice president of marketing:

Consumer fears over bill shock have generally faded, but the tactic used to dispel those fears, unlimited data plans, has noticeable consequences.

From smartphones to mobile broadband dongles, embedded 3G modules and MiFi units, the range of data hungry products and services promoted in 2009, coupled with the availability of low cost unlimited data plans, has created unprecedented strain on networks.

This puts the industry in a difficult position. Having spent considerable effort raising consumer awareness around data, many networks have now hinted at the need to try and curb traffic by educating consumers about their data consumption, in particular, the handful of ‘power users’ that account for the vast majority of traffic.

Strategies for managing this problem range from the sensible, if not challenging, to the downright absurd. Several operators have already come in for criticism after discretely rewriting the rule book and restricting their unlimited data plans to the disadvantage of paying consumers. A good example is the additional charge now being placed on consumers who wish to tether their phones to a laptop to create a remote modem, even if they have an unlimited data plan. Cries of ‘double dipping’ have rung loud.

 

Tim Deluca-Smith, WDSGlobal vice
Tim Deluca-Smith, WDSGlobal vice president of marketing

Most likely, the year ahead will see the introduction of some innovative pricing models, such as tiered pricing with consumers charged in bands depending on their usage. We will also see policies to restrict file sharing and streaming media applications and technologies to offload non-core data traffic through WiFi networks.

It should also be noted that unlimited data plans have effectively capped the revenue generating potential of smartphones and other data devices. This puts additional attention on managing profitability of subscribers.

Unfortunately, mobile broadband services (in the form of USB dongles and embedded devices) are more expensive to support than any other wireless service. Our own study found that the cost to support mobile broadband products and services is up to 200% greater than the cost to support traditional wireless products such as mobile phones. This means that despite revenue uplift from increased data usage, actual subscriber profitability often remains unchanged and sometimes even worsens.

The area of greatest concern came from USB and PC Card modems. These are sold to allow subscribers’ access to a mobile operator’s 3G HSPA or EV-DO mobile broadband services from a laptop or netbook. The average duration of a technical support call for such products is 28 minutes. By comparison, a technical support call for a mobile phone averages just less than 10 minutes. The findings come from analysis of more than half a million ‘technical’ support enquiries. More than 600 wireless devices were represented in the study, which spanned a six month period between September 2008 and February 2009.

 

Max Taylor, T-Mobile UK head of business marketing:

There is no doubt that mobile broadband is growing in popularity; at T-Mobile, we saw our data traffic more than double in 2009 compared to 2008, carrying 7.6 terrabytes of mobile data.

We expect mobile broadband to grow in popularity throughout 2010 as we complete the network share with 3 and ramp up our smartphone portfolio. Alongside a recognition by the public of improved network coverage, there are a few key reasons for this huge increase in data traffic.

The emergence of a wider trend in business communication to allow staff to work remotely was fuelled in 2009 by companies reigning in spending in all areas. One way they did this was to offer staff the option to work remotely. This reduces travel costs, room hire costs and improves staff productivity when on the move, meaning mobile broadband moves from being a ‘nice to have’ extra to an essential business tool.

Max Taylor, T-Mobile UK head
Max Taylor, T-Mobile UK head of business marketing
 

Alongside its cost cutting benefits, mobile working continues to be a key attraction for staff due to its ability to offer them a more flexible approach to working hours and an effective work-life balance. Indeed, a survey last year found that 20% of UK workers would even take a pay cut in order to work remotely.

The popularity of mobile working and the associated use of mobile broadband is only likely to rise further with recent pressure on the Government by the Chartered Institute of Personnel and Development to extend ‘the right to request’ flexible working to all UK workers.

Further to this, the rise of the smartphone has certainly had an impact on mobile broadband popularity. The numbers back up this picture of increasing worldwide smartphone popularity; Frost & Sullivan estimates that 190 million smartphones were sold globally in 2009 and a further 250 million sales are predicted for 2010.

With nearly 200 million people using smartphones across the world, the likelihood is that many will be using the devices for personal and professional purposes. This blurring of the function of mobile devices is another key indication of the importance of mobile broadband to our society. As people’s working pattern merge with their personal lives, they will expect and need to have access to the internet from any location on smartphones at all times.

Mobile apps are a key consideration both for business and consumer use of mobile broadband. Gartner predicts Android will overtake the iPhone in 2012, when it forecasts around 100 million Android phones will be sold. Android developments will therefore be a key driver for this growth.

With planned software releases providing users with ever better features and functionality, a smoother touchscreen interface and faster browsing capability, the app trend is likely to go from strength to strength. In recognition of this trend, T-Mobile has created its own app, shareAnywhere, which helps businesses share information about products and services with customers and colleagues wherever they are.

With regards to customer billing, the ability to accurately predict costs and manage cashflow was a strong focus in 2009. Corporate mobile broadband tariffs that deliver value, simplicity and flexibility are key to encouraging mobile broadband growth. The introduction of our Business Unlimited plan last year was in direct response to this.

Added to this, both businesses and consumers are becoming increasingly keen to use their mobile broadband when abroad, with an Omnibus survey showing 40% of consumers would take their laptops on holiday if they could get connected to the internet easily. As a result, we’ve recently introduced a new Euro booster option to offer a simple and flexible way to pay for using the internet abroad with no hidden costs.

All in all, it is likely that a combination of increasing network strength, a growing recognition of the benefits of flexible working, a surge in the popularity of smartphones and increasingly flexible tariffs are all contributing to the phenomenal popularity of mobile broadband we are now witnessing.