Little room in wireless data margins

Margins for wireless data are only ever going to get tighter, according to research published this week by Analysys.

It may sound blindingly obvious but the quest for greater ARPU in the face of falling voice revenues is resulting in the widespread adoption of low cost bundled data tariffs.

This, in combination with new access networks, could dramatically decrease the price per megabyte of mobile data, the research company said.

“There is increasing uncertainty over the future of the wireless industry, and it could evolve in radically different ways,” said co-author of the report, The Future of the Global Wireless Industry: scenarios for 2007-12, Mark Heath.

“Organisations need to generate robust plans to steer the industry in their preferred direction, and to ensure success regardless of how the market develops,” he said.

The research firm’s predictions for the future of data will make uncomfortable reading for operators that continue to rail against the bit pipe model.

Wireless data is set to become a commodity as a result of the widespread introduction of low cost, unlimited usage mobile data packages and the deployment of WiMAX networks, the report predicts.

Mobile networks will become data pipes, in much the same way as fixed networks. MNOs will lose control of – and subsequently the revenue from – the services that are carried across their networks.

Carriers should instead focus on reducing cellular network costs substantially so that they can deliver high volumes of data traffic profitably, the analyst said.

“We are already seeing early signs of this scenario,” said Alastair Brydon, co-author of the report. “The number of relatively inexpensive, uncapped usage data tariffs from mobile operators is increasing. For example, T-Mobile UK’s Web ‘n’ Walk Plus service offers 3GB of internet access for only £29 per month.

“Furthermore, some operators are allowing unlimited Skype voice calling, which enables mobile users to bypass conventional mobile operator voice services,” he said.

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