Only a minority of tablet computer devices are connected to cellular networks and in a number of markets, including Ireland, Spain and the UK, mobile broadband is either in decline or has stagnated.
Analysys Mason, in its Connected Consumer 2013 survey, reports that the European mobile broadband market is undergoing a major shift, caused by multi-device ownership.
Rather than delivering stellar growth, tablet users tend to rely on Wi-Fi networks at home.
However, this may be a market on the verge of major growth when 4G eventually arrives; providing consumers with speeds similar to Wi-Fi while on the move. The question, ultimately, is how much consumers will be willing to pay for it.
Analysys Mason reports that the cellular market is primed in anticipation for a dramatic increase in mobile broadband use on smartphones, too.
Mobile broadband revenue in Europe reached €9.9bn in 2012, and the analyst firm forecasts it to grow to €10.5bn by 2018 (at a CAGR of 1pc), with a peak of €11.0bn in 2015.
Most of the growth between 2012 and 2015 will come from tablet connections and LTE services. LTE will slow the decline of mobile broadband ARPU in some countries, but its impact will be limited by the increasing share of LTE mobile broadband connections in countries where operators do not charge a premium for LTE.
Operators are still experimenting with LTE pricing and the outlook for the impact of LTE on ARPU remains unclear.
The number of mid-screen connections are forecast to increase from 10.1 at the end of 2012 to 33.7m at the end of 2018.
Large-screen connections will decline from 51.8m to 41.6m during the same period. This may be driven by increased options and choices, such as tethering notebooks and tablets to Wi-Fi on smartphones or using 3G or 4G-based mobile broadband devices that can support up to 10 users simultaneously.
Around 37pc of smartphone respondents in France, Germany, Poland, Spain, the UK and the US have used smartphone tethering at least once.
Tablet ownership can drive the use of tethering: 46pc of tablet owners in Spain said they had used smartphone tethering at least once. Smartphone data is more expensive than mobile broadband data, and revenue from smartphone data will partially offset the decline in mobile broadband revenue. However, the increase in smartphone tethering shifts revenue from mobile broadband to handset connections.
The mobile broadband market may also recover when wearable computing devices like Google Glass or Samsung’s Galaxy Gear become a mass-market phenomenon.
The decline of mobile broadband in Europe
Subscriber numbers declined in several countries in Western Europe in the six months running up to March 2013, following market stagnation during the past couple of years.
The Irish regulator ComReg reported that the mobile broadband market has stagnated (at about 0.6m subscribers) in the past few years. However, between the third quarter of 2012 and the first quarter of 2013, subscriber numbers declined by 13pc to 0.5m.
CMT, the Spanish regulator, reported that mobile broadband had 2.4m subscribers at the end of March 2013, but that this figure had declined by 15pc during the previous six months.
According to UK regulator Ofcom’s reporting, the mobile broadband subscriber base in the UK has stagnated at about 5m during the past few years. In the six months to March 2013, the number of subscribers declined by 3pc to 4.9m.
4G mobile image via Shutterstock