The Online Act

Mobile Broadband Operators Incurring Losses

May 26th, 2009

Mobile broadband has now become an indispensable tool for a large number of customers. Its convenience and cheap service have rendered it extremely popular, and this is reflected in the expanding subscriber base for mobile broadband operators.

However, the service providers are making little profit in this burgeoning business, as a recent report called “Successful strategies in the mobile broadband market” reveals. According to the report, which was published by telecom analysts Strand Consult, a number of mobile broadband providers are failing to even cover their costs.

The competitive prices at which mobile data is sold is often too low for an operator’s benefit, as revenues barely meet half the cost incurred when producing the required amounts of mobile data.

Contrary to expectation, Strand Consult is not advising mobile broadband businesses to raise their rates, as that would reduce the customer base. What they recommend, however, is to aim at reducing the costs incurred, and finding alternate sources of revenue. If operators continue to stack up losses, there could be other adjustments too, such as limits being placed on several features like VoIP and P2P, or introducing certain premium services at some extra cost. Click here for more info and the latest mobile broadband news.

The publication by Strand is certainly not one of a kind, but like its predecessors, it also warns of high costs of mobile broadband services. Therefore, it seems that in near future, the price structure of mobile broadband is bound to change.

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