October 30, 2008

Survey: Unlimited Mobile Broadband a Trap for Operators

Camiant's newly published research, "Mobile Broadband in North America and Europe: Change is Key to Maintaining Profitability," explores mobile broadband adoption and growth trends in Europe and North America as well as operators' capabilities to control and monetize growth. The custom research outlines the challenges in the mobile broadband marketplace and proposes a set of elements for new business models to alleviate expected negative consequences of broadband commoditization.

According to the findings, mobile broadband affords tremendous growth opportunities for operators; however, given the popularity of data cards and smart phones and the cost of adding network capacity, operators can expect to hit network limitations fairly quickly. With operators seeing anywhere from 100 percent to 800 percent bandwidth growth, there is a clear need to design new business models for the mobile broadband market. Existing business models, especially the "unlimited" models popular in Western Europe and the United States, have dangerous drawbacks that will become apparent in the next three to five years. As mobile broadband adoption continues to grow and traffic volume skyrockets, the revenue that these models deliver will fail to offset the costs of delivering the traffic.