Contradictory Evidence on Mobile Broadband Demand

Users accessing mobile broadband-enabled laptops and handsets will increase revenue by more than 450 percent in 2014 compared to 2008, say researchers at Ovum (News - Alert), creating $137 billion globally. Ovum expects 258 million users to access mobile broadband services through laptops by 2014, which translates into 1022 percent growth from 2008.

But a new poll conducted by Broadband Genie found more than 60 percent of respondents saying "free" laptop deals don't offer enough value for the money. Just 15 percent of respondents thought they represented "good" value.

To be sure, there are differences between markets in different regions and countries. But the survey results suggests consumer users in the U.K. market are not especially enamored of wireless PC connections, even when the cost of a notebook PC with built-in dongle is "zero."

That shifts the estimation of value directly to recurring cost, terms and conditions of use. By U.S. standards, U.K prices are favorable. Users can buy service for about $25 a month, with a 3 Gigabyte usage cap, compared to $60 a month costs in the U.S. market.

One might surmise that strong PC mobile broadband sales have been driven by business users. But that might not be the case elsewhere.

Asia-Pacific was home to some 121 million 3G subscribers in 2007 and an estimated 158.4 million in 2008. Of course, nearly all of those accounts supported mobile phones. By 2013, the region's 3G subscriber base is forecast to reach 564 million, accounting for about 18.2 percent of all mobile users, say researchers at Frost & Sullivan (News - Alert).

But Frost & Sullivan senior industry analyst Marc Einstein says "dongles and data cards are increasingly a preferred connectivity device of choice for Asia-Pac's broadband subscribers."

Einstein forecasts that, by 2013, more than one in every three new broadband subscriber in the Asia-Pacific region will use dongles or data cards, giving fixed broadband players a serious challenge.

Frost & Sullivan estimates there were 5.2 million mobile broadband dongle and data-card users in the Asia-Pacific region in 2008, with revenues of $1.3 billion.

The market research firm believes that there will be nearly 37 million 3G subscribers using external wireless devices for their PC connections by year end-2013, with estimated billable revenues of $7.8 billion.

The uptake for these 3G devices is expected to accelerate after 2010 once 3G services become commercially available in most large Asian markets, the research firm suggests.

China is expected to be the single largest market for the device with 20 percent (7.4 million) of the region's dongle or data card users by 2013; India, a close enough second with 5.55 million (15 percent) dongle or data card subscribers.

Relatively undeveloped fixed infrastructure will drive demand in the Asia-Pacific region.

Broadband Genie editor Chris Marling suspects a lack of consumer confidence in the product could be a key contributor to end user skepticism. In particular, users might be rebelling against real-world performance that lags the stated claims.

Mobile broadband ISPs are continuing to market their products with “up to” speeds of anywhere from 3 Mbps to more than 7 Mbps, but the reality for most is speeds far below that, Marling says.

Beyond that, there may be end user preferences in the U.K. market that make mobile PC usage less important than in some other markets.

Alternatively, users might simply be concluding that the "free" notebooks are actually not free, or have other limitations that make the free PC offers unattractive.

It also is possible that many users are evaluating the PC mobile broadband offers in comparison to Wi-Fi offers, and that users simply are concluding Wi-Fi is a better alternative.

In any event, the resistance to "free" notebook offers is significant, as the objections seemingly would, in that case be about the price or terms and conditions of service, not the need to buy a dongle or client device.