opinion


Fixed broadband to remain dominant in Europe

Telecoms analyst Forrester recently released research refuting mobile industry predictions that mobile broadband connections could overtake fixed in as little as five years.

But the mobile share of the European broadband market will grow to 27 per cent of all connections by the end of 2013, with fixed representing 67 per cent, down from 88 per cent in 2008. The remaining ten per cent will account for users who have both types of connection, said Forrester.

Cellular carriers are seeing rapid growth in USB modems, said the analyst firm, citing 2007 sales in Finland of over 400,000 (from a population of a little over five million) and 3UK shifting 500,000 units in six months. But there are several drawbacks to the proposition that, by Forrester’s reckoning, will stop it displacing fixed broadband.

Performance is one of them. Even with HSDPA the theoretical maximum speed for these services is 7Mbps, the firm said, with actual performance ordinarily falling some way short of this. Fixed speeds are routinely far higher. And while almost all mobile operators now pitch offers of ‘unlimited’ data consumption, they all attach ‘reasonable usage’ caveats to their services.

“Fixed ISPs take little direct action with consumers who break their “fair use” policies,” said Forrester. “[But] the reverse is true for mobile broadband consumers who exceed their usage cap: Vodafone UK currently charges £15 per GB for usage above the fair-usage threshold.”

Comparatively week indoor coverage and a higher penetration of desktop (stationary) PCs than laptops will act as further drags on the uptake of USB broadband solutions, the firm said.

But the outlook for cellular broadband solutions is by no means grim. Forrester believes that the growing popularity of laptops over desktops will spell good news for cellular carriers and that latecomers to the broadband market – users who don’t yet have broadband of any type – are likely to opt for cellular solutions for reasons of pricing and simplicity.

The mobile broadband consumer base will grow to 40 million by 2013, the firm said.


One comment

  1. Rene Dos Remedios 29/07/2008 @ 4:28 pm

    In the article, your author quoted Forrester as stating “Even with HSDPA the theoretical maximum speed for these services is 7Mbps, the firm said, with actual performance ordinarily falling some way short of this.”

    I really think that the telecommunications press is misleading the public into thinking that mobile broadband is a real alternative to fixed broadband. As many industry insiders know, the 7Mbps or 3 Mbps or 10Mbps speed claimed for mobile broadband is the speed shared by all the users connected to a basestation. For fixed broadband, the 1Mbps or 2Mbps or 7Mbps speed is the speed of the connection to the DSLAM or BRAS or High Speed Router that can have backbone connectivity capacities ranging in Gbps to Tbps.

    The difference in delivered subscriber capacity between mobile and fixed is not “some way short of this” it is greater than the difference between fixed broadband and dialup. In dialup, every subscriber gets 56kbps, in mobile broadband each subscriber can end up with only 3Kbps to 10 Kbps or less of allocated capacity considering that a typical base station can cover 1 sq km to 4 sq km. This issue is getting accentuated as the average data consumption per user keeps growing with the wider use of peer to peer and video traffic.

    The only way that mobile broadband will be a viable alternative to fixed broadband in terms of giving the fixed or mobile consumer a similar experience in a similarly dense network is if every mobile user has a femtocell in their home – dedicated to their exclusive use. Unfortunately, I don’t see that happening at all, considering the popularity of WiFi.

    Don’t get me wrong, I’m in the Philippines and I regularly access the mobile broadband network through my HSDPA cellphone Bluetooth interface and I think
    it’s great. However, mobile broadband is not a replacement for fixed broadband. It is an altogether new service that will demand new applications and create new opportunities for Telco operators in much the same way that SMS has revolutionized the cellular business model in many places.

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