Mobile broadband fails to convince consumers

13 Apr 2007

Mobile broadband services have failed to capture the interest of average consumers across the world, a new report has claimed.

Users are unwilling to pay a premium for mobile broadband services, a new report from Parks Associates has suggested. It said that only internet users in the UK are willing pay a significant premium (28pc) over the cost of a fixed connection for mobile broadband access at home or on the move.

US consumers are willing to pay only a 6pc premium for a basic mobile broadband service.

Consumers in countries with advanced phone-centric mobile internet services such as South Korea, Japan and Italy are even less interested in paying a premium for mobile broadband access.

“Wireless broadband access services marketed by mobile carriers today resonate with road warriors and are having success in that segment,” said Michael Cai, director of broadband and gaming at Parks Associates, “but the majority of internet users primarily access the internet at home and work and are unwilling to pay more for a subscription service they won’t use on a frequent basis.”

The report found that at US$35 a month, a rate much lower than the prevailing price offered by major mobile carriers, only 19pc of US internet users are interested in adopting a mobile broadband service.

At this price point, the total worldwide addressable market is less than 100 million subscribers.

“The road warrior market offers great ARPU [average revenue per user] potential but is limited in size,” Cai said. “In order to expand beyond this segment, mobile carriers need to provide application-centric rather than access-centric mobile broadband services and offer a variety of flexible business models that fit consumers’ usage patterns.”

By John Kennedy