Mobile broadband:Fat pipe on the move

Mobile broadband:Fat pipe on the move

Mobile Broadband

Mobile broadband is a massive growth market for this industry. Vodafone currently has 3.4 million mobile broadband customers in Europe and it expects that number to continue to rise for a number of years. This market has been dominated by the business sector for a long time, but now it is the turn of the consumer. Here, Heather McLean takes a look at how mobile broadband is really going places…

Mobile broadband sales are booming across the industry. The key attribute of mobile broadband is undoubtedly its simple proposition of mobilising a customer’s internet usage and creating a high speed interface between the wired and wireless environments, says Julien

Parven, sales and marketing director at Fone Logistics.

Vicky Brame, data specialist at Redstone Mobile, comments: “Mobile broadband offers the end user the flexibility to use the internet wherever they are. With the product constantly being enhanced by the networks, mobile broadband is becoming more of a necessity to people’s lives, rather than a desired object.”

 

Booming sales for broadband

In the last three months Fone Logistics reported increases in mobile broadband sales of 166%, with T-Mobile and 3 representing the greatest percentage of the volumes.

Genesis provides mobile broadband to business users over the Vodafone network. Rosie Walton, product manager for voice and data solutions at Genesis Communications, says users are attracted to this technology as it provides fast access to the internet on either a laptop or desktop PC. Additionally, Vodafone has reliable network coverage with over 80% of the UK population now within its mobile broadband coverage footprint, a figure that is expanding.

Walton says: “Sales of mobile broadband devices at Genesis have increased by 165% since January 2008. In one month alone, sales of connections represented one in three of all connections sold that month. So the opportunity is huge and we anticipate sales to continue at a similar rate, particularly as fuel prices continue to soar, encouraging staff to work at home where appropriate.”

Since Vodafone was first to market with a mobile broadband device nearly two years ago, the product has gone from strength to strength, says Alec Howard, head of data connectivity at Vodafone UK. Usage has increased six fold for Vodafone and it expects that figure to continue to grow in the near future.

Howard comments: “There are two key attractions of mobile broadband, the first of which is that is it so simple to use. When 3G data cards were first launched over three years ago, at more like dial up speeds, users had to install software from a CD and go through a set up process. Mobile broadband is an advance from that, because users only need to plug a USB stick modem into a laptop, the software automatically loads up and then they click to connect.” The second key selling point is the speed, Howard continues: “Vodafone’s Mobile Broadband service today is a significant advance from the original 3G service, capable of running up to 30 times faster and with similar speeds to those that many people experience on their fixed line broadband connections at home.

 

HSUPA means more uplink and more fun

“We should also remember that the addition of the high speed uplink packet access (HSUPA) upgrade last year has increased uplink speeds dramatically, making it much easier to send files as well as receive them,” Howard says. “This has opened up new markets. For example we are selling a lot of mobile broadband devices to press photographers that need to send pictures straight back to their picture desk from the site of a news story.”

In July 2008, T-Mobile launched a nationwide HSUPA network, giving customers up to a fivefold increase in upload speeds. HSUPA lets users share photos and videos, increasingly important for customers of the social networking generation, who want to be constantly in touch online.

Richard Warmsley, head of internet and entertainment at T-Mobile, adds: “The technology is simple and straight forward; literally plug and play when using a USB dongle or stick. Mobile broadband has really taken off with both our businesses and consumers over the last 12 to18 months and now, one in four of all new customers to T-Mobile is a mobile broadband customer. We’ve seen a 360% year on year rise in mobile broadband users.”

There are already more than 185 commercially deployed high speed packet access (HSPA) networks, serving more than one billion subscribers in over 80 countries worldwide. A burgeoning ecosystem of mobile broadband devices and services has emerged around the technology. For example, there are around 750 HSPAenabled devices on the market, including phones, notebooks, PC modems and wireless routers.

Keith Westcott, vice president of marketing at Ericsson UK, comments: “We see a strong growth in mobile data traffic. Data traffic tripled in 2006 and by mid 2007, it passed voice traffic in WCDMA/ HSPA networks. When operators introduce flat fee for mobile broadband connections the data traffic really takes off.”

Westcott continues to add that the prerequisites are in place for a mass market for mobile broadband. He says market projections indicate that in 2011, approximately 200 million notebooks will ship annually. Ericsson anticipates that 50% of those notebooks will feature a built-in HSPA mobile broadband module.

Vodafone is also seeing a significant rise in the number of laptop manufacturers offering built-in mobile broadband, such as the recent launch from Lenovo, adds Howard. He estimates that within a few years, built-in

Julien Parven, sales and marketing
Julien Parven, sales and marketing director at Fone Logistics
 
Richard Warmsley
Richard Warmsley, head of internet and entertainment at T-Mobile
mobile broadband will be standard in laptops.
 

New generation consumers go mobile

Mobile broadband is now penetrating the consumer market. Westcott comments: “Having mobile broadband access to the web and the ability to run rich multimedia applications is ideally suited to the generation of ‘digital natives’ who want to communicate and share with their networks and communities on the go. Ericsson also sees mobile broadband being integrated more consumer devices over time.

“The first wave of mobile broadband is in notebooks aimed at business users; second in notebooks aimed at consumers; and third in other consumer electronic devices such as GPS navigators, in-car entertainment systems, gaming devices , cameras and so called mobile internet devices, to name a few,” Westcott explains.

But what sort of consumer finds mobile broadband of benefit? Vodafone’s Howard says consumers that tend to change their address quite a lot, such as students, find the service to be a real benefit. “It means that they don’t get tied to contracts with fixed line providers that are too long for their needs and don’t have to go through the hassle and delay of setting up with a new provider every time they move house,” he explains.

Apart from being sold as standalone products, mobile broadband is being sold by retailers such as PC World by bundling the mobile broadband sticks with laptops. On a 24 month contract with either HP or DELL there is a £100 cash back offer, which PC World has been offering for around one year. Lenovo is selling its Thinkpad series of laptops with built in mobile broadband at no extra cost, making even easier to use and buy.

Mobile broadband offers the consumer a complete wireless broadband solution that is affordable, Brame comments. “With broadband speeds of up to 7.2, mobile broadband offers a good alternative to wireless hubs, with an added advantage; there is no need for a fixed landline cost. The mobile broadband devices on the market are small and compact, they do not take up any space and they are easy to set up. And as with the mobile aspect of the device, consumers have the flexibility to take their broadband anywhere.”

 

From office fever to roaming free

The mobile broadband market was born out of business usage and was nearly exclusively the preserve of the business customer until this year. Westcott says: “Business users typically want to use mobile broadband as an add-on to their fixed access. It enables organisations to improve productivity. Many see mobile broadband as the ideal solution for keeping employees in touch with clients, suppliers and colleagues. By enabling them to be online at all times, no matter where they are, enterprises can capitalise on mobility by increasing efficiency on a large scale.”

While Howard comments: “The attraction with this technology has always been the ability to access company files and resources while on the move without trying to connect via expensive hotel room connections or trying to find WiFi hotpsots. For this reason many companies are now deploying VPNs that can be accessed using a mobile broadband connection.”

Business is no longer about sitting in an office working on a computer, it is about meeting people, travelling to different locations and going abroad, which is why mobile broadband offers the business users the ability to work as efficient as normal away from the office, agrees Brame.

For the business user, mobile broadband removes the confines of the office, allowing them to work on the go, whenever and wherever they choose, says Warmsley. For small businesses, it can reduce the cost of overheads, and also allows workers to be online in transit, maximising productivity and efficiency. It can also increase employee satisfaction, he adds.

According to T-Mobile, currently a massive 79% of office workers get less than one hour outside a day, which can have a detrimental effect on their morale and work rate, while another T-Mobile survey found that four out of five workers do not feel motivated as a result of being desk bound. Warmsley states: “We found that 48% of workers believe a change of location would boost productivity, and mobile broadband can allow them to be constantly achieving that goal.”

T-Mobile’s research also found that people want to use the internet wherever they go, even on the beach. Nearly half of those questioned, 44%, want to log on whilst relaxing in the back garden, and 32% want to be able to dial up from any holiday destination this year, plus a further 8% want to use the net while at the pub.

 

Making the sale

Mobile Broadband is growing in popularity as a channel sale in direct reflection of by how much the network providers are investing in the commission package, Parven comments. He says: “Over the past six months, mobile broadband has shifted from being a minority sale performed by more specialist, forward thinking resellers, to a core product sold in as a complimentary solution to the mobile voice service and bundled with suitable hardware, making a product bundle similar in commercial and concept to that of a handset sale.

“However, there is absolutely scope for further improvement, with dealers starting to understand the service options in terms of speeds and download capabilities, allowing them to sell mobile broadband as a user solution rather than a technical product,” adds Parven.

Brame says: “Mobile Broadband is a growing aspect of the market, and we feel that the best way to help our business partners sell is to help them understand. Redstone is currently running a variety of workshops around the UK, where our business partners can attend and learn about mobile broadband and other data products and services. Dealers currently focus on the ease of use aspect to the customer and the fantastic coverage offered by the networks. The dealers should focus on meeting the requests of the end user, providing a complete mobility solution.”

Competition is increasing in the mobile broadband sales market, and prices have dropped dramatically, states Walton. She explains: “It’s almost expected now to get a device at low cost if not for free on a contract. Dealers are continuing to compete with flat rate price plans and although data usage is increasing, the revenues from the usage may not. Dealers should therefore look at other ways to differentiate themselves to offset their declining voice revenues. Introducing related products and services to their customer base, such as mobile broadband or hosted IT solutions will improve customer stickiness.”

The use of unfamiliar technology and terminology by the providers is an issue, Parven reflects: “To a channel well versed in mobile voice, with text and picture messaging being explicit in their meaning, the transition to understanding megabits per second or bandwidth is not a seamless one. However, this becomes much simpler when the capacities and speeds are related to a simple user experience, such as number of email downloads or internet page impression.”

Hutchison 3G said this year that a one gigabit allowance provides users with

Alec Howard, head of data connectivity
Alec Howard, head of data connectivity at Vodafone UK
 
Keith Westcott
Keith Westcott, vice president of marketing at Ericsson UK

up to 650 emails, 30 hours web surfing, 60 music track downloads and 30 video downloads.

While Walton says transparency of pricing is the main issue dealers have to work around: “There has been a lot of press regarding usage charges for mobile broadband, especially when using the device whilst abroad. Therefore it’s essential that charges are made clear to end users so expectations are managed at the outset. Once users have gone over their inclusive data bundle, they need to be made aware of the price per megabit thereafter and any roaming charges.”

So it seems that mobile broadband is hear to stay. Westcott says the technology will even make WiFi redundant. “One of Ericsson’s executives recently described Wi-Fi hotspots in places like Starbucks as the telephone boxes of the broadband era,” Westcott says. “Mobile broadband will make them obsolete simply because of the freedom and mobility it offers.” We shall have to wait and see…

 
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