Fixed line broadband under threat from wireless

Stan Beer
Tuesday, 05 February 2008 16:05

Business IT - Technology

Mobile broadband is fast approaching the point globally where it is becoming a credible threat to residential fixed-line broadband services. This is the view of a European based telecommunications analyst firm.

Two reports from telecoms analyst firm Ovum, "Mobile: Challenging fixed lines for residential broadband" and "Fixed mobile substitution: The data challenge", maintain that mobile operators have a wide range of options to compete in the broadband space. Specifically, HSPA (high speed packet access) enabling data transfer speeds of 3.6Mbps and higher is making wireless a viable option.

According to John Lively, an analyst at Ovum, HSPA technology is being deployed by hundreds of operators and the number of subscribers and devices sold is sky-rocketing. What's more, Lively says, the biggest growth area is the 'large screen' segment, that is broadband delivered via HSPA to dongles and air-cards attached to notebook computers or even embedded in notebooks. In one European market, sales of a single type of air-card recently outstripped sales of mobile phones of all types.

Lively says: "David Williams, CTO of Telefonica O2 Europe, related that user adoption in this segment is driven by two things: the comparative ease of installation of an air-card vs. DSL (which requires a visit from the local fixed-network provider), and flat-rate or flat-top usage plans. HSPA data rates are currently at 3.6Mbit/s which makes it squarely competitive with first generation DSL. And upgrades to 7.2Mbit/s (as planned by Telefonica O2 Europe this year) will put it in the same league as first-generation cable modems. Development of HSPA-capable femtocells is underway, to further the competitive positioning of HSPA as a replacement for residential fixed-broadband."

Despite the challenge thrown out by wireless broadband, there are still issues that need to be overcome, says Lively.

"It will take time for mobile speeds to reach fixed equivalents. Furthermore, there is the issue of 'how much speed do you need?' In our experience mobile downlink speeds are sufficient for 'average' Internet usage today, but slow uplink can prove a barrier. In the future, we expect that as the usage of more bandwidth-hungry applications increases, the advantage will again rest with fixed broadband. There will be pressure on LTE to maintain cellular's pressure on fixed network speeds."