Is The Mobile Broadband Bubble Going To Burst?

We're big fans of mobile broadband around here at Lifehacker, and judging by usage numbers, we're far from alone. However, that popularity can have a downside: if the services turn out not to be profitable, they could become much more expensive quite quickly.

Picture by zanastardust

That issue is highlighted in a recent market analysis by Telsyte, which underscores what you might already suspect: there's not a lot of money to be made from people paying $50 a month or less (often much less) for mobile bandwidth. As Telsyte puts it:

Demand for mobile data bandwidth – and thus the cost of delivering services to support it – is rising much faster than revenue, creating a growing gap that threatens to undermine the future profitability of carriers’ mobile data business. Telsyte analysis shows that that the cost of delivering mobile data services in Australia in the next five years will grow by more than five-fold while revenue will less than double.

Depending on your carrier, you might already be experiencing the unpleasant side of this equation: either higher per-megabyte prices, or much less reliable service. None of that's to say that mobile broadband is going to go away, but it's worth bearing in mind when you're selecting your next plan.


    Hmm.. interesting-- though considering that telstra recently lowered the cost of their mobile wireless- that would seem to suggest the opposite-- mind you they were grossly overpriced previously-I'm on a Exetel service at the moment-- it is magic

      Prices can't get worse than the $1.32/60kB ($22.53/MB) that Optus currently charges their pre-paid mobile users as a casual rate. This was their only rate less than two years ago.

      So I would disagree with your notion that data services on the NextG network are over-priced. :)

    We should be looking to 4G technology like WiMax instead of trying to milk the consumers with ripoff 3G internet.

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