News

But what would be the point of "free" mobile broadband?

by Guy J Kewney | posted on 13 June 2008

"With competition reaching its zenith in the mobile broadband market, it is only a matter of time before mobile broadband modems (aka 'dongles') are offered for free in conjunction with mobile phone packages in the same way as ISPs such as TalkTalk currently offer 'free' home broadband with home phone deals," says Jessica McArdle from Top 10 Broadband.

There is, undoubtedly, a load of nonsense being uttered on the subject of mobile broadband. For example:

A survey questioned 38 mobile operators across Europe and found that the average price for downloading a megabyte of data within the EU was 5.06 euros (£3.99) at the end of March 2008. At the close of 2007 the cost was 5.62 euros (£4.43)

wrote a BBC web site reporter yesterday, just a day after McArdle's comment. Her figures on data costs: Data charges too have fallen from £45 per Gb to just £3.57 per Gb (3’s current Mobile Broadband Max package) and £3.50 per Gb (T-Mobile’s current Web’n’Walk Max package).

Those figures can be reconciled, but it takes some hard work with a spreadsheet. At the end of the calculations, you can tell some people are being stiffed. Those figures can be reconciled, but it takes some hard work with a spreadsheet. At the end of the calculations, you can tell some people are being stiffed.

What isn't clear, is whether it's the mobile operators who are winning this one.

The runaway train which is Vodafone's mobile "dongle" promotion is backed by a deal with BT, to provide the new masts and backhaul capacity that it needs to be able to keep pace with demand. There's a lot of money being invested, and Voda is profiting from a good deal (say some) at BT's expense.

But other operators don't have this leeway, not yet - and information shown to NewsWireless (and not audited) suggests that they have only a small fraction of the market compared to Vodafone.

The question that these statements don't answer is: does this all help the bottom line? Are these dongles a profitable operation? And if they are, how long can operators keep up with Vodafone, if they don't have the same capital expenditure programmes?