Mobile operators find out the dangers of becoming a dumb pipe
As mobile phones become computers, laptops have become more like mobile phones. Even veterans in the industry have been taken aback at how fast mobile broadband has been embraced – using ‘dongles’ or built – in receivers in order to give internet access to laptops through high – speed mobile networks. The advantage of this is that it can be used everywhere and, unlike Wi-Fi, you are not restricted to a particular place. In just Western Europe, the number of mobile – broadband users will increase by 50% to at least 27 million this year, according to an analyst firm, IDC. There are about 100 million users worldwide.
What’s the reason for this boom in these times of economic recession? Operators have been reducing prices for data connections: 3 charges just 10 pounds for 1 GB of data. Dongle prices are also reducing. Connection speeds continue to go up as operators better their networks. The surprising success of netbooks have also contributed to this. Some operators have even gone to the extent of providing netbooks with contracts.
However, this growth has its disadvantages for operators. One of them is the reduction in control. Subscribers are allowed to do whatever they please: the operator is just a spectator who provides a ‘dumb pipe’ to the internet. Rates have also been falling fast. Didier Bonnet of popular consulting firm Capgemini, noted that the pricing is crazy and that mobile broadband is starting to become just another good.
Another downfall is overuse. Operators complain that a small proportion of users use most of the bandwidth. Illegal file – sharers are hard to track. In order to reduce their usage, operators are considering giving higher priority to some data packets over others. Holger Knopke, T-Mobile, said that ‘network neutrality’ will not be a success.
If they don’t want margins to drop, operators should look to increase their level of service and differentiate them. Olaf Swantee, Orange’s head of mobile operations, says that they have to innovate!
Source - economist.com
