Mobile broadband a complement says analyst

Fixed line substitution is a blind alley for cellular carriers looking to market their mobile broadband services in Western Europe and they would be better off focusing on complementary prepaid offerings. Such is the advice from consultancy Ovum.  Penetration of fixed broadband is so high in the region, said analyst Steven Hartley, that mobile broadband will struggle to compete.

The performance of fixed services – in terms of capacity and speed – is too strong for mobile to offer a realistic alternative, he said. Aside from niche markets like habitually nomadic consumers, or those in short term accommodation – segments which are decreasing in number anyway, as fixed players saturate the market – end users have ready access to fixed broadband solutions.

Cellular carriers should instead look to position their broadband services as a complement to domestic fixed offerings. While long term contracts have appeal for operators in that they help guarantee future revenues, the preferable option, said Ovum, would be to offer prepaid solutions that allow consumer to use mobile broadband only as and when they need it. 

“The timing for a focus on prepaid is perfect,” said Hartley. “With Christmas approaching everyone wins –  those purchasing a bundle as a gift have no contract commitment, end users have a flexible mobile broadband service and operators gain new customers and revenues.”