Market Society

Many reports on the pricing structure of mobile broadband have suggested that it is unsustainable as the costs exceed the revenue inflow. Although it is too difficult to predict when the existing mobile broadband prices would change, most analysts are certain that eventually such an action would come. The latest analyst to confirm this is Strand Consult.

In its report, “Successful Strategies in the mobile broadband market”, Strand has said that mobile broadband service providers in most countries have priced their services so low that they are unable to recover their operating costs. According to Strand, the low pricing wars and free laptop deals is due to severe competition in the market with heavyweights squeezing each other.

Although this is good news for the customers, it is a big problem for the operators since many of them have to offer their service at a price that is about half the amount it costs to provide that volume of mobile data.

Strand does not advise mobile broadband providers to hike the prices, as it could mean a switch by current customers to rival providers owing to the high competition in the sector. Instead, they should aim at finding new revenue generating and cost reduction avenues.

However, the pricing of mobile broadband could still get affected in more subtle ways. For example, the operators could resort to limiting usage of certain aspects of the service like peer-to-peer and VoIP. They could also look at introducing value added services, which would cost customers much more.

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