Mobile Broadband: another substitution threat for fixed operators?

Table of Contents

0 Summary

1. Mobile broadband is rapidly taking market share from fixed broadband

• 1.1 The consumer broadband market is now at a crossroads
• 1.2 Mobile broadband is known to account for nearly 20% of some broadband markets and is growing fast
• 1.3 Although prices are not directly comparable, mobile broadband can already appear cheaper than fixed
• 1.4 There is already evidence of considerable substitution of fixed broadband

2. Network capacity and costs place some limits on the rate of substitution by mobile broadband

• 2.1 External factors can cause regional differences in mobile broadband take-up
• 2.2 The mean usage per broadband customer can disguise a low median usage
• 2.3 MNOs need to dissociate network costs from bandwidth demands
• 2.4 MNOs can pull a number of retail levers to manage costs
• 2.5 Fixed broadband costs cannot fall much further, and could conceivably rise

3. Mobile broadband will have profound implications for the strategyof mobile and fixed operators

• 3.1 Mobile broadband will reduce fixed broadband penetration
• 3.2 MNOs' convergence strategies are beginning to shift again
• 3.3 Fixed broadband players will have to re-invent themselves again
• 3.4 The outlook for fixed wholesale divisions is mixed

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List of figures and tables

• Figure 1.1: Proportion of total broadband subscribers taking mobile broadband compared to that taking DSL in selected European markets, 1Q 2008
• Figure 1.2: Comparison of prices for contract mobile broadband and DSL in 26 European markets at 2Q 2008
• Figure 1.3: Price of annual contract for mobile broadband as a proportion of per-capita GDP in 26 European markets at 2Q 2008
• Figure 1.4: Comparison of spend on mobile voice minutes and price of mobile broadband in 26 European markets at 2Q 2008
• Figure 1.5: Premiums for mobile broadband and mobile voice in 26 European markets at 2Q 2008
• Figure 1.6: Broadband subscribers in Austria, 1Q 2007 - 1Q 2008
• Figure 2.1: Percentage of households with no fixed service in selected markets, EOY2007
• Table 2.1: Availability of main 3GPP advanced wireless technologies
• Figure 2.2: Trends in mobile data usage, TDM backhaul costs and ARPU
• Figure 2.3: Typical mobile network operating costs per subscriber per cellular sector
• Figure 2.4: Typical DSL network costs per subscriber per exchange for full and shared LLUB
• Figure 3.1: Mobile modem and datacard broadband subscriptions, new and substitutive and complementary, in Europe, 2006 - 2013
• Figure 3.2: Fixed and mobile broadband subscriptions in Europe, 2006 - 2013
• Figure 3.3: Broadband-equipped sites in Europe, split into fixed-only, fixed and mobile, and mobile-only, 2006 - 2013
• Figure 3.4: Percentage of mobile-only broadband homes, 2013