Mobile is the way to go

Staff Writer
23 Nov 2010

Wimax and HSPA are the most affordable broadband options for consumers in emerging markets

Consumers wanting to take up broadband will do well to go the mobile route, as Wimax and HSPA, or a combination of both technologies, present the lowest entry-level and per-MB usage plans in emerging market.

An Ovum study titled broadband pricing in emerging markets: a comparison of DSL, Wimax and HSPA finds that the most price-conscious consumers may opt to go with HSPA since it offers the lowest entry-level rate at an average of only $381 a year in the 15 countries in the study.

This low entry-level price point also gives HSPA the highest affordability index computed by dividing an economy's gross domestic product per capita by the annual cost of a service package of 51.

Compared with DSL and Wimax, Ovum computations show that HSPA rates are lower than DSL in 12 of the examined markets and lower than Wimax in 11 emerging economies. The average entry-level HSPA package also costs 36% less than DSL and 38% less than Wimax.

This, however, does not necessarily mean that HSPA offers the best value for money. According to the study, while HSPA entry-level package prices and per-MB rates are lower than both DSL and Wimax, HSPA entry-level plans have far lower usage caps than those offered for the two other technologies. Among the 15 operators examined, only six operators offer entry-level plans with a usage limit of more than 1GB. (see chart above)

In this arena, Wimax emerges as the winner, with the study showing that it offers the best value-for-money entry-level broadband packages, with the average emerging market price placed at only $432 a year but with higher usage caps than HSPA plans. This pricing strategy is reflective of service providers?positioning of Wimax as a cheaper alternative to DSL.

Unlike HSPA low usage caps, entry-level Wimax packages have generally higher limits, mostly mirroring those offered by DSL service providers. In many markets, Wimax packages provide 512-kbps services without download limits, similar to DSL packages. (See chart page 15)

In terms of price, the study shows that, in eight of the 15 markets surveyed, Wimax packages are more expensive than their HSPA counterparts, but largely because of higher download limits. Compared with DSL, Wimax is priced lower in eight of the 15 countries included in the study.

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