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The Cost of Mobility

The Cost of Mobility

Posted by Shara Evans in Press Releases 23 May 2011

Understanding the value of mobile broadband services: Convenience is popular, but it comes at a cost

SYDNEY, 23 May 2011: Australia’s huge appetite for mobile broadband – there were more than 4.2 million users in December 2010, according to the Australian Bureau of Statistics – comes at a cost, according to Sydney-based analyst firm Market Clarity.

While users appear happy to pay a premium for the convenience of mobile broadband, Market Clarity’s analysis of fixed and mobile broadband tariffs shows that the mobile user can pay as much as 1,333 times the fixed broadband user, on a per-gigabyte basis. The analysis is published in a free Market Clarity report, The Cost of Mobility: Comparing the Value of Fixed and Mobile Broadband.

The tariffs analysed in this study, which were current at the end of March 2011, also show that pre-paid mobile broadband users pay between 3.2 and 5.8 times the per-GB cost of post-paid data.

“We love convenience, but overlook how much it can cost,” said Shara Evans, CEO of Market Clarity. “The mobility premium is the result of many factors, most particularly the higher underlying network costs, which are escalating with the success of new devices like the iPhone and tablet computers.

“While carriers are looking for ways to increase the revenue they receive from mobile broadband services, fixed providers are expanding their data allowances,” Evans said. “The resulting dynamic is that the ‘value gap’ between the two technologies is widening, and may continue to do so for some time.”

Market Clarity has decided to publish this report at no cost, as its contribution to the ongoing debate over the National Broadband Network.

“Nobody can doubt the popularity of mobile broadband. However, we believe its price premium makes it unsustainable as an alternative technology to deliver broadband to all of Australia,” Evans said. “This research highlights the complementary nature of different broadband technologies.”

Other findings of the study include:

  • The most-competitive post-paid mobile broadband offering on the benchmark date, at $1.66 per GB, was still more than 27 times the price per unit of data than the ‘best value’ fixed broadband service, at six cents per GB.
  • The cheapest per-GB price for pre-paid mobile broadband, nearly $10 per GB, was 161 times the same $0.06 per GB fixed broadband plan.
  • Median fixed broadband data allowances are 100 times the median pre-paid “recharge” volume, and 40 times the median post-paid volume allowance.

The report, The Cost of Mobility: Comparing the Value of Fixed and Mobile Broadband, can be downloaded here.

 

About Market Clarity

Market Clarity is an award-winning telecommunications analyst firm founded in January 2006 by leading Australian telecommunications researcher and strategic consultant, Shara Evans. The firm covers all aspects of telecommunications, including traditional and converged services and technologies. Market Clarity’s extensive databases of technical and market information cover a wide range of facts and figures on the technologies and services that are shaping the Australian telecommunications market. Market Clarity’s GIS tools and research databases enable the correlation and presentation of highly complex information in an intuitive geographic (map) format.

Market Clarity’s insights are derived from a deep understanding of technology, coupled with comprehensive research, which examines each segment of a service’s value chain as well as underlying population demographics. By leveraging its engineering knowledge with an ongoing primary research program, Market Clarity provides insight, intelligence and advice on all aspects of the Australian telecommunications market including traditional, converged and future technologies. Market Clarity’s unparalleled market knowledge and research databases are brought to all consulting engagements.

Market Clarity’s contribution to telecommunications in Australia was recognised by the telecommunications industry’s peak body, the Communications Alliance, which awarded the company its 2007 ACOMMS award for Services to the Industry – Professional Services.

Market Clarity is headquartered in Sydney, Australia.

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