Margins to Plummet As Mobile Services Compete with Fixed

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The widespread introduction of low cost bundled data tariffs and new access networks could lead to dramatic decreases in the price per megabyte of mobile data and operators might lose control of the services that they carry according to a forthcoming report published by Analysys.

"There is increasing uncertainty over the future of the wireless industry, and it could evolve in radically different ways," says co-author Dr Mark Heath. "Organisations need to generate robust plans to steer the industry in their preferred direction, and to ensure success regardless of how the market develops."

Analysys has defined three plausible scenarios for the evolution of the wireless industry during the next five years:

  • Low?cost Data Pipes
  • Emerging Markets Thrive
  • Cellular Goes Indoors

In the 'Low?cost Data Pipes' scenario, wireless data becomes a commodity as a result of the widespread introduction of low-cost, unlimited-usage mobile data packages and the deployment of WiMAX networks. Mobile networks become transparent data pipes, in much the same way as fixed networks, and mobile operators lose control of (and the revenue from) the services that are carried across their networks. Mobile operators have to focus on reducing cellular network costs substantially so that they can deliver high volumes of data traffic profitably.

"We are already seeing early signs of this scenario," says Dr Alastair Brydon, co-author of the report. "The number of relatively inexpensive, uncapped-usage data tariffs from mobile operators is increasing. For example, T-Mobile UK's web'n'walk Plus service offers 3GB of Internet access for only GBP29 (US$55) per month, which equates to US$0.02 revenue per megabyte. Furthermore, some operators are allowing unlimited Skype voice calling, which enables mobile users to bypass conventional mobile operator voice services."

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