Broadband

Late adopters are going to treble mobile broadband penetration over the next five years as more than one in three of net newcomers foregoes a fixed line contract in favour of a go-anywhere broadband dongle.

The latest findings from technology researchers at Forrester suggests that of the 48m Europeans that are expected to sign up for a broadband packages in the next five years for the first time - the ‘late adopter’ market - 17m will forego the traditional fixed line route. Add to this 9m the researchers believe will migrate from fixed services to mobile alternative and the researchers believe the mobile broadband market will rocket from 8% today to 23% in 2013.

It is important to note, though, that these figures apply to people new to broadband and those switching because the Forrester research counters claims by some researchers and mobile broadband exponents that mobile technology is due to overtake fixed line services.

With such a massive fixed line user base already in place and with two in three Europeans owning a fixed, desktop PC, Its figures suggest that even by 2013 two thirds of internet connections in Western Europe will be fixed whilst nearly one in four (23%) will be mobile, leaving 10% of the market which will have mobile and fixed broadband deals.

However, with a market share of 88% today, dropping to 67% in five years time, it is clear the researchers believe fixed line’s near total dominance is due to end.

The reports cites a growing desire for people to be online whilst on the move as the main reason behind the huge surge in demand for mobile broadband which is perpetuated by people discovering, or seeing others, discovering and using Wi-Fi hotspots.

The major issue holding back mobile broadband, though, the researchers believe, is its inability to compete for speed with fibre in metropolitan areas and its relatively high cost. This will particularly impact on heavy data users who, on a mobile tariff, are charged for going over a download limit or exceeding the terms of a fair use policy. Also HSDPA’s poor indoor performance in many areas will prevent a mass exodus from fixed to broadband connections, the report concludes.

So, although the researchers believe their findings will console fixed line providers somewhat by reassuring them that suggestions the market is ditching the telephone point and heading for mobile only tariffs are overhyped. However, the overriding conclusion of the research is that fixed line providers need to adapt their strategies to take in to account the appeal of mobile broadband. This, the they claim, will see ISPs following BT’s lead with Fon and setting up Wi-Fi communities.

“Since 2007, mobile broadband USB modem sales have rocketed; their fast uptake has caught everyone by surprise, including the mobile operators that actually sell this product,” sums up Forrester researcher Pete Nuthall.

“Their success is worrying product strategists at fixed operators as they struggle to assess the impact on their residential fixed broadband business. Many observers predict that mobile broadband connections will overtake fixed within the next five years. Our forecast for consumer mobile broadband refutes that, but we do see an erosion of new business in the late adopter market for broadband services. We foresee as many as 50% of late adopters - households that are new to broadband - buying mobile broadband instead of fixed. We recommend that product strategists at fixed operators target this segment with greater precision and more relevant promotions in response.”

Tags: BT