Mobile Broadband: Not So Plug and Play

Mobile broadband represents the future of wireless, right? While that may be the case, a new study from WDSGlobal shows the support associated with mobile broadband services endanger profitability for many mobile network operators.

Source: WDSGlobal

The study found that the cost to support mobile broadband products and services is more than 200 percent greater than the cost to support traditional wireless products, such as mobile phones. That means despite revenue uplift from increased data usage, actual subscriber profitability often remains unchanged and sometimes even worsens.

The area of greatest concern came from USB modems and PC cards, typically sold by network operators to allow subscribers access to mobile broadband services from their laptops or netbooks. The average duration of a technical support call for such products is 28 minutes. By comparison, a technical support call for a mobile phone averages less than 10 minutes.

The findings come from analysis of more than half a million support inquiries taken by WDSGlobal on behalf of its mobile network operator and handset manufacturer customers. More than 600 wireless devices were represented in the study, which spanned a six-month period between September 2008 and February 2009.

“This is a problem that we see frequently,” says Steve Nasca, general manager/Americas for WDSGlobal. “New mobile products and services are introduced to generate greater ARPU (average revenue per user). However, the increased complexity of these devices means that during the early adopter phase, the cost to support them often increases. More subscribers call in with problems, and the time it takes to a resolve those problems increases. All of this hits the bottom line.

A higher-than-average cost to support mobile broadband products and services is a global issue. However, the impact on subscriber profitability is more pronounced in North America and Europe, where mobile broadband is seen as a means to counter a reduction in voice revenue.

WDSGlobal cites the complexity of set-up and ongoing configuration issues as key challenges for operators to overcome. The problem, WDSGlobal suggests, is not with the technology itself but the necessity for these products to be set up and installed on third-party hardware and software outside of a mobile network operator’s control.

 

Multimedia Phones &Mobile Video Viewing

While slightly less than a quarter (24 percent) of consumers are using a multimedia-enabled phone, such devices will play a critical role in enticing consumers to watch TV and video on their mobile phone, according to an independent Market Tools survey commissioned by mobile video solutions provider QuickPlay Media.

Thirty-eight percent of respondents said that if they were considering changing wireless carriers, their ability to offer the latest multimedia-enabled PDA/smartphone would impact their decision to choose that carrier. Forty-one percent that they would be more likely to watch TV and videos on their phone if they owned a multimedia-enabled PDA/smartphone.

Fifty-five percent of respondents stated they are interested in mobile TV and video. Nearly half (46 percent) are aware that their carrier offers a mobile TV and/or video service, an improvement from 35 percent in 2008. That change provides an indication that video services are benefiting from the marketing efforts around multimedia-enabled devices such as the iPhone and Blackberry Storm.

The survey also showed that video viewing habits have seen a shift in terms of where consumers are watching: 30 percent of consumers are watching TV and video on their mobile device when at home versus 11 percent in 2008.

 

Light PC Internet Users vs. Heavy Users

Light PC Internet users are 30 percent more likely than heavy PC Internet users to use their mobile devices to access Internet content, according to a comScore report. In total, 42 million people used their mobile devices in October 2008 to access news and information content on the Internet, an increase of 57 percent from October 2007. The study also found that mobile Internet users are more likely to be male (58 percent) and to be 18 to 44 years of age.

 

Survey Measures Employee Satisfaction

Employees of mobile manufacturers generally seem more satisfied than employees of wireless carriers, according to a survey by Glassdoor.com earlier this year. On average, handset manufacturers received a 3.4 company rating, whereas carriers received an average 2.9 company rating. The exception was Motorola, which had a 2.6 overall rating.