With mobile broadband, who needs an NBN?

Nathan Burley/Ovum
20 Nov 2008
00:00
News
Commentary

Take-up of mobile broadband in Australia has been extraordinary. Ovum estimates there were over 1 million mobile broadband connections to PCs at June 2008.

Prices for mobile broadband fell over 60% between July 2007 and October 2008. Pricing has now bottomed out, with products removed and limited-time offers expiring.

The biggest potential for mobile broadband growth in Australia comes from existing dial-up and the large low-end ADSL user base. HSPA could comfortably provide many Australians' broadband service.

According to the Australian Bureau of Statistics, 45% of broadband connections in Australia were at speeds below 1.5Mbps in June 2008. The average download amount across all broadband connections in Australia is 3.4GB per month.

However, the small proportion of high-usage connections inflates this figure. For example, one ISP recently stated that more than 50% of its user base downloaded less than 1GB per month. Both these levels of speed and download requirements could be comfortably provided by HSPA at competitive or lower-price points.

Further market potential exists for dial-up users - be it as a back up for another broadband service or as a dedicated Internet service. HSPA offers higher download speeds at potentially lower cost as dial-up users generally download small amounts of data. HSPA also offers the advantage of no call charges and potentially the ability to cut a fixed line and save associated line-rental charges.

If users are prepared to "cut the cord", up to A$30 ($19.05) in savings make any wireless broadband offering very attractive. Presumably, this will become increasingly important if macroeconomic conditions continue to negatively affect the Australian economy.

However, there are clearly barriers to users disconnecting a fixed line, such as the unwillingness to abandon a long-standing fixed phone number.

For a broadband ISP, an ideal HSPA broadband service would therefore include the ability to offer VoIP and number portability. This will make the technology even more disruptive.

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