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June 29, 2009
Mobility will be the Fixed Broadband Killer App
By Gary Kim, Contributing Editor
The killer app for fixed broadband now is Internet access. In the future, mobility will be the killer app that ensures fixed broadband remains a key foundation for consumer communication and entertainment services.
That might strike you as odd. As wireless broadband - based both on wireless data cards and dongles as well as mobile handsets - grows, so do concerns about the long-term health of the fixed broadband business. After all, some would argue, why bother with a tethered broadband connection when a wireless substitute of high functionality will be available.
Cost is the reason consumers will have all the incentives they need to maintain their fixed broadband connections: the cost of mobile broadband plans on most devices that consume video. Simply, to save money, consumers will want to offload some of that consumption to their fixed broadband connections, which always will cost less, per megabyte, than wireless connections.
AT&T (News - Alert), for example, has talked conceptually about such unified access plans for some time, and now is taking direct steps to prepare for such a future by readying a national rollout of femtocell technology.
Femtocells (News - Alert) allow existing handsets to switch to an in-home base station instead of relying on the macrocell network. That shifts consumption to the fixed line. Both carriers and consumers will have financial incentives to make sure that happens on a wide scale.
And scale likely will be necessary. Some note that carriers such as Orange, that have been using femtocells for a couple years, have found operational cost issues.
Some 10 percent of Orange customers move annually and as a result Femtocells must be easily moved around and be reinstalled. The cost of an install appears to run about $422 to $700 per truck roll.
That makes for a tough business case, when consumers are not paying for the installs. Still, there is reason to believe the install costs will drop over time, as they have for virtually every other wireline service.
Gary Kim (News - Alert) is a contributing editor for TMCnet. To read more of Gary’s articles, please visit his columnist page.
Edited by Stefania Viscusi
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