Is Mobile Broadband Still Considered a Luxury?
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Steady gains in mobile broadband subscriber growth suffered a hiccup in the fourth quarter as consumers cut back on discretionary spending, according to a report released today from comScore.
During the fourth-quarter, growth in the number of mobile broadband users dropped to 5 percent after six consecutive quarters of double-digit growth, according to comScore -- down from a 22 percent hike in the prior quarter.
"We've observed a significant deceleration in subscriber growth during Q4 2008 coinciding with the economic downturn, an indication that mobile broadband service may still be seen by many as a luxury rather than a necessity," Serge Matta, senior vice president at comScore, said in a statement.
"Now is the time for mobile broadband providers to solidify their market position, because as the economy begins to recover and discretionary spending resumes, the market will likely accelerate once again," he said. "Verizon appears well-positioned for this eventual resurgence, having gained two market share points in the past year."
The news comes at a time when the smartphone market is heating up, with sales pegged to grow, albeit at a slower rate, over the next five years. Meanwhile, mobile broadband is also increasing smartphone app usage, which in turn is spawning a surge in mobile advertising.
While the economy may be putting pressure on consumers' willingness to spend for mobile broadband, the area is still seen as one of the strongest in IT.
Newly released mobile broadband forecasts from telecom consulting firm Ovum show that users accessing the Internet by mobile broadband enabled laptops and handsets will generate revenues of $137 billion globally in 2014, over 450 percent more than in 2008.
Additionally, the explosive mobile broadband adoption continues to fuel the smartphone market, Ovum mobile analyst Steven Hartley told InternetNews.com.
"It's a major driver for smartphone uptake in the 'handset' element of our forecasts," said Hartley, who authored the Ovum report. "However, in the 'laptop' side, I don't really see mobile broadband on a laptop substituting a smartphone sale."
"In fact, I'd argue that those with a smartphone are actually more likely to want a datacard; embedded laptop, [a] USB modem, and vice versa," he said. "They already know it's important to be connected almost continually and are more likely to want to access the Internet from anywhere, anytime."
The most pertinent factors fueling the growth of wireless broadband include better coverage, demand and more affordable pricing plans.
[cob:Special_Report]"3G and 3.5G networks are appearing in new markets from AT&T and T-Mobile on an almost weekly basis," Hartley said. "You've also got Clearwire promoting and expanding mobile WiMAX. Regardless of technology used, it's still the same impact -- more people get to know about the potential."
"It's also simply about the desire for ubiquitous access to the internet -- anytime, anywhere, anyhow," he added. "For that we have growing fixed broadband penetration to thank. People are used to having Internet access at home and in the office, so why not in-between and elsewhere?"
Simpler and more affordable pricing plans are also boosting mobile broadband adoption, he said -- though it may mean less revenue for carriers.
"Tariff plans are getting simpler to understand and cheaper. X amount of money for X amount of data is a very clear proposition to consumers. When X gets to sub-$50, then it's more affordable to more people," Hartely said. "It's interesting to note that in Austria, which is one of the leading mobile broadband-via-laptop [markets] in Europe, they're currently running a special, limited period offer of 10GB of data per month for just 10 Euros [about $13] per month. That gives some idea of just how much demand, and competition for that demand, there is."