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Mobile Broadband Subscriber Growth Decelerates in Q4 2008

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comScore has published the results of a study of U.S. Internet usage via mobile PC data cards, which showed that the subscriber base which previously had been growing strongly began to decelerate noticeably in Q4 2008.

The study examined the usage and characteristics of mobile PC data card users through data collected from computers where Internet access via mobile broadband Internet service providers (ISPs) occurred.

PC Data Card Growth Pulls Back in Q4 2008

PC data card adoption grew 163 percent overall in 2008, slightly ahead of the 157 percent growth rate in 2007, a confirmation of the market's strong growth trajectory. However, despite this rapid adoption curve, Q4 2008 showed the first signs of softness in the market, as sequential quarterly subscriber growth fell to just 5 percent, following sequential growth of 22 percent in Q3 2008 and several preceding quarters of double-digit growth.

Mobile Broadband Subscriber Growth by Quarter

Total U.S. - Home/Work/University Locations

Quarter   Growth vs.
Prior Quarter
Q2 2007   11%
Q3 2007   27%
Q4 2007   28%
Q1 2008   12%
Q2 2008   14%
Q3 2008   22%
Q4 2008    5%

"The PC data card market is clearly in the early stages of its adoption curve, with the overall number of subscribers multiplying in the past few years," said Serge Matta , comScore senior vice president. "That said, 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. Now is the time for mobile broadband providers to solidify their market position, because as the economy begins to recover and discretionary spending resume the market will likely accelerate once again. Verizon appears well-positioned for this eventual resurgence, having gained 2 market share points in the past year."

PC Data Card Access Does Not Represent Incremental Internet Usage Overall

The study also compared the Internet usage patterns of mobile broadband PC data card users with the general U.S. Internet population to determine how the availability of mobile broadband affects online time. It is important to understand whether online access via mobile broadband represents incremental Internet usage or merely a shift in usage time between different access points.

When looking at the population in aggregate, the results indicated that PC data card usage actually represents a time-shift in Internet consumption, as PC data card users spent nearly the same amount of time online (89 hours) as typical U.S. Internet users (90 hours) during Q4 2008. Of PC data card users with both a PC data card and a wireline ISP, approximately 25 percent of their total online time (22 hours) was spent using a PC data card.

"That aggregate Internet usage via PC data card is not incremental to standard wireline Internet usage suggests that it's a valuable convenience feature for many Internet users," added Matta. "That said, there are also certain segments with PC data cards that do spend additional time online, likely indicating that these segments see PC data card as more of a necessity. Carriers seeking to generate strong PC data card subscriber growth during the current downturn will need to focus their marketing efforts on the differing needs of the various segments and consider offering financial incentives in this tough economic environment if they hope to continue attracting new users."

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