Mobile Broadband Providers Need to Increase Costs, or Risk Continued Losses
A recent report by telecom consultants Strand Consult shows that while consumers are benefiting immensely from the competitive rates of mobile broadband, the service providers are leaking money.
According to the publication titled “Successful strategies in the mobile broadband market”, mobile broadband service providers have been forced to lower their prices to stay competitive in the market. For many providers this has resulted in the selling price of mobile broadband coming down to nearly half of the cost of producing the required volume of mobile data.
Along with the free laptop deals, the low rates are excellent for the customers and they are creating a huge influx of new mobile broadband subscribers, but this trend of consistently running into the red must stop if mobile broadband is to be made financially sustainable. However, as Strand analysts point out, merely raising the prices of mobile broadband will just result in a decline in the number of customers, which is certainly not desirable.
What the analysts propose is a gradual reduction in costs, introducing certain premium services, and limiting data intensive services like VoIP and P2P. New sources of revenue and cost reduction will also help service providers recoup a major part of their investment.
Despite all these measures, it is unlikely that mobile broadband will be able to retain its present competitive rates. Sooner or later, the prices will rise, and customers must be prepared for that.
