Operators Could Recoup Investment in Unbundled DSL Within 3 Years
The provision of fixed broadband is becoming essential for mobile operators and they could quickly recoup the substantial investment necessary to offer their own unbundled DSL services if they achieved strong service uptake, concludes a new report from Analysys.
"DSL services can generate nine times the ARPU earned by many mobile operators today from mobile data services. However, the challenge is to offer such services profitably," says Dr Mark Heath of Analysys.
"If 10% of its customers subscribed to DSL services, a large mobile operator could achieve a 16% cost saving in the provision of DSL services by investing in its own LLUB network," adds Heath.
Other key findings of the report include:
- There is a strong case for mobile operators bundling fixed broadband with their traditional mobile services. However, as investors increasingly focus on bottom-line performance as well as on revenue, operators must ensure that broadband services do not damage their profitability. With the wrong implementation choice, margins could be wafer thin.
- While wireless technologies, such as HSPA, CDMA2000 1× EV-DO Revision A and WiMAX, have been touted as viable ways for mobile operators to offer fixed broadband services, DSL is the most appropriate choice for the short term in developed countries. HSPA could not profitably support average monthly usage levels of 2GB or more per customer.
- While some operators, such as Vodafone UK, have chosen to resell the DSL services of the incumbent fixed operator (BT), local loop unbundling can achieve greater profitability.
"If fixed broadband services are to be profitable and to make a noticeable difference to mobile operators? revenue, a typical mobile operator must encourage at least 10?20% of its customer base to subscribe to its DSL services," says Dr Alastair Brydon, co-author of the report. "While there are risks involved, investment in LLUB could pay back in less than three years."
Posted to the site on 2nd April 2007
