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According to the Chinese calendar 2010 is the year of the Tiger, but we think it’s the year of the consumer. We have just started this year and already we have seen massive changes within the telecommunications industry, and all have been in favour of the consumer. Whether it is cost, quality, transparency or speed of delivery, mobile operators are being forced to meet consumers’ increasingly high expectations.
This is particularly true when it comes to broadband. Not only has demand for the service increased but so too has the need to have it on the move. This is where the ‘dongle’ came in, making mobile internet a reality and allowing its subscribers internet access wherever they are. Free dongles, unlimited access on smart phones and subsidised notebooks have all catapulted subscriber numbers nationally.
Despite this insatiable appetite for mobile broadband, the global recession has led to fierce competition between mobile operators fighting for customers on the basis of price and special offers.
Unfortunately however, it was only a matter of time before something had to give, and like the ISPs before them, we have seen massive price reductions from mobile operators offering broadband. This, unfortunately, has meant a decline in the quality of service that is being delivered in terms of promised speed and congestion problems.
Ofcom released a report last year naming and shaming UK ISPs for not delivering the broadband speeds they had advertised , giving consumers a guide as to where to get the best service and the ISPs a clear indicator that their focus needs to be on quality and speed, rather than just price. But rather than wait for an Ofcom expose or for Lord Carter to pen a follow-up to his recent Digital Britain report, mobile broadband providers need to learn the lessons of the ISPs and act now to raise the quality of their services before the public loses faith and patience with them.
In June 2009, research firm Epitiro revealed that average mobile broadband speeds for the UK are well below download speeds advertised by providers. There is a big difference in the theoretical maximum mobile broadband speed and the reality experienced by consumers. Maximum speed is dependent on many things including the user’s distance from the base station, whether they are on the move, the number of concurrent users and bandwidth usage for the specific base station.
Informa reported that in 2009, global mobile broadband subscriptions will hit almost 236 million; the main driver being the uptake of flat fee pricing plans with usage caps. In fact, there are some areas where mobile broadband is a substitute for fixed line broadband. Before they are put under the same scrutiny as fixed line providers, mobile operators need to guarantee quality of service for specific user groups, by differentiating service offerings against tiered pricing options, matched to consumer usage preference and needs.
Operators will eventually need to hike up their prices to pay for the infrastructure upgrades needed to deliver the speed and capacity of faster 4G and LTE broadband. This is not going to sit too well with consumers as they will not want to spend more on what they could previously get for less. This could potentially be a huge problem for mobile broadband providers as loyalty will be difficult to maintain, especially as the focus returns for the best value for money.
With their current market approach, mobile operators are in serious danger of moving in the same direction as fixed operators. Mobile broadband providers need to act fast and use the recent Ofcom ISP report as a warning to improve on the service they provide and before Ofcom has to ‘name and shame’ them.
Operators need to control costs and traffic flow, manage users’ QoS effectively, efficiently and quickly and very importantly increase the average profit per megabyte. Mobile broadband has huge potential to be a great revenue source for operators, as long as they learn from the mistakes of ISPs
Acision is a global messaging company. Acision provides communication solutions for over 300 network operators and service providers globally. http://www.acision.com/