Full Value of Mobile Broadband Access Unclear to Average Consumers

Mobile broadband access services have failed worldwide to capture the interest of average consumers, with Internet users in most countries unwilling to pay a premium for such services, according to a new report, Mobile Broadband Wireless: Path toward 4G. The reports examines next-generation mobile broadband wireless solutions, including 801.16e/WiBro, FLASH-OFDM, and cellular solutions.

This new report from Parks Associates finds that only Internet users in the U.K. are willing to pay a significant premium (28% on average) over the cost of a fixed connection for mobile broadband access, defined as a wireless high-speed service with which users can access the Internet wirelessly at home and in other locations. U.S. consumers are willing to pay only a 6% premium for a basic mobile broadband service. Consumers in countries with advanced phone-centric mobile Internet services are even less interested in paying a premium for mobile broadband access.

"Wireless broadband access services marketed by mobile carriers today resonate with road warriors and are having success in that segment," said Yuanzhe (Michael) Cai, director of broadband and gaming, Parks Associates, "but the majority of Internet users primarily access the Internet at home and work and are unwilling to pay more for a subscription service they won't use on a frequent basis."

The report finds that at $35 a month, a rate much lower than the prevailing price offered by major mobile carriers, only 19% of U.S. Internet users are interested in adopting a mobile broadband service. At this price point, the total worldwide addressable market is less than 100 million subscribers.

"The road warrior market offers great ARPU potential but is limited in size," Cai said. "In order to expand beyond this segment, mobile carriers need to provide application-centric rather than access-centric mobile broadband services and offer flexible business models that fit consumers' usage patterns."

Parks Associates is a market research and consulting firm focused on all product and service segments that are "digital" or provide connectivity within the home. The company's expertise includes home networks, digital entertainment, consumer electronics, broadband and Internet services, and home systems.