Mobile Broadband Operators Not Covering Costs, Say Analysts
Many mobile broadband operators are not covering their costs because in many countries, the retail price for mobile broadband is below the production price, according to telecoms analysts Strand Consult.
In a report titled “Successful Strategies in the mobile broadband market”, Strand point out that tough competition in the mobile broadband market has resulted in prices dropping, which is great news for consumers, but leaves many operators selling mobile broadband for approximately half the price it costs them to produce that volume of mobile data.
But Strand are not advocating mobile broadband providers raising their prices; in fact in such a competitive market Strand’s analysts advise that this would be counter-productive – instead they recommend providers look to new revenue sources and cost reductions within the business. This could still affect the mobile broadband pricing we see available, however. If operators cannot cover their costs, the likelihood is that certain adjustments will be made such as limiting the use of basic mobile broadband connections (including peer-to-peer and VoIP), and the introduction of premium services which cost extra.
