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IDC: Mobile broadband market floodgates opened

Competition between Vodafone and Telecom’s new XT network will finally push open the mobile broadband floodgates, driving mobile growth up 19 percent to 5.516 million connections by 2013, according to IDC New Zealand.

Telecommunications research manager, Rosalie Nelson, says that New Zealand already has more mobile connections than people, with 110 percent mobile penetration by the end of 2008.

However, take up of new types of mobile handsets, devices such as USB connectors and 3G embedded laptops and notebooks will take penetration to 127 percent over the next five years, according to IDC’s newly released forecasts.

Nelson says that while this level of mobile penetration was unheard of three or four years ago, it is very much in line with international markets.

“The average number of mobile connections per population in Western Europe was 123 percent by the end of 2008, with the most advanced markets showing up to 160 percent penetration- that is 1.6 mobile connections for every man, woman and child,” she says.

IDC NZ is forecasting seven percent growth in total mobile revenues over the five year period to $2.3 billion, with the erosion of traditional voice and messaging revenues partly offset by a 179 percent growth in mobile internet and broadband revenues to $576 million.

“This is a real bright spot for operators, who are seeing their core business under increasing price pressure. Mobile broadband represents a new revenue stream – and one that operators do not have to share with third parties, like content or music rights owners. She adds that IDC has seen a 22 percent growth in consumer notebook sales over the past year, while the number of commercial notebooks sold increased 15 percent.

“This represents a growth opportunity.”

However Nelson warns this growth will only be achieved if the operators balance the growth in speed and capacity of 3G networks with flexible pricing.

“Internationally, flat rate pricing and pre-pay pricing models have allowed customers to manage their budgets without bill shock. We don’t anticipate cut-throat pricing locally, as both Vodafone and Telecom will want to manage the growth in traffic and usage on their newly expanded network. Telecom in particular will want to minimise the risk of users substituting their fixed connection for mobile.”

Nelson adds that the price of mobile broadband needs to come down and decent data caps offered.

“For example, a 1GB monthly broadband plan is between $49.95 to $67.44 depending upon the contract term. In Australia you can get 1GB for $A19.95 ($NZ25) or 5GB for A$39.95 ($51).”