Flat rated mobile broadband
In South Africa broadband users have grown accustomed to broadband usage limits, typically ranging between 500 MB and 15 GB depending on the broadband provider. Internationally uncapped broadband is the norm, something which began spilling over into the mobile broadband market.
While fixed line broadband services can typically cope with very high usage on the network using uncontended fixed line last mile access technologies like FTTH, Cable Modem and ADSL, the same does not hold for mobile services.
With mobile services a limited amount of spectrum is available to serve consumers and a typical cellular base station can easily get congested when too many broadband subscribers utilize the tower’s resources. This is something which witnessed when Sentech first launched its uncapped services in 2004 and more recently when Neotel’s rapid subscriber growth resulted in some users experiencing poor speeds and deteriorated service levels due to tower congestion.
Gartner’s Will Hahn said that many international mobile carriers have shot themselves in the foot by offering flat rated mobile data packages as it has turned out to be unprofitable and unsustainable. Hahn said that these carriers are now looking at acceptable ways to back out of their flat rated offerings and migrating users to a reasonable usage platform.
Vodacom CEO Pieter Uys confirmed Hahn’s statement when he recently said that it is simply not possible for a mobile data provider to compete against fixed line services with high usage cost models. Uys said that international carriers possibly cross-subsidize their high end mobile data offerings but added that these packages cannot make money as a stand-alone product.
Long Term Evolution (LTE) may however come to the rescue of mobile operators who continue to grapple with the high bandwidth demands from consumers who are unwilling to increase their monthly data spend. These increased data needs mean that operators are looking for more bandwidth, increased efficiency at a lower cost.
Nokia Siemens Networks (NSN) feels that LTE, which offers significant per-Mbps network savings, may be able to support the new price points which consumers expect from mobile data providers. LTE is more spectral efficient than 3G/HSDPA and is based on a flat network architecture with an Ethernet/IP core.
LTE scales well when it comes to increasing network capacity and addressing end user bandwidth demands, something which bodes well for a future where data dominated networks will replace today’s voice dominated cellular networks.
Is flat rated mobile broadband feasible?
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