Mobile Broadband: another substitution threat for fixed operators?

Abstract

“ Fixed broadband now has a rival that can inflict serious damage. As mobile operators shift from convergence to substitution strategies, fixed operators need to focus on adaptation rather than on defence.”

The popularity of mobile broadband access via USB modems has taken mobile and fixed operators in Europe by surprise. Fixed operators are concerned because they are losing market share in the area that has been their major engine of growth; mobile operators are worried because competition in mobile broadband has driven down retail prices to far below cost. This report explains the new dynamics of the broadband market with reference to the cost and retail levers that mobile operators can pull. It also examines the longer-term strategic implications for the fixed industry of facing another round of substitution and those for the future of convergence.

The report provides forecasts of numbers of mobile broadband subscribers in 26 European markets to 2013, breaking subscriptions down into those that are new and substitutive and those that are complementary to fixed. In addition, the report provides snapshots of the price of over 450 mobile broadband services across Europe in 1Q and 2Q 2008.

• What is the penetration of mobile broadband now?
• How far is the growth of mobile broadband limited by cost?
• What will mobile operators do to control costs?
• To what extent will mobile broadband be substitutive or complementary?
• Which European markets will be most receptive to mobile broadband?

• Fixed operators: Understand the drivers for, and limitations on, the growth of mobile broadband. See granular forecasts for individual markets that show the potential substitutive effect of mobile broadband. Understand the strategic implications of mobile broadband for the different parts of your businesses.
• ISPs: See how mobile broadband will affect the value of your businesses.
• Mobile operators: Pinpoint the differences between European markets, with respect to mobile broadband. Understand the size of the addressable market for mobile broadband.