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UK operator 3 shakes up the mobile broadband market with the launch of HSDPA services starting at $20 per month

3 Heats Up HSDPA in UK

Michelle Donegan
LR Mobile News Analysis
Michelle Donegan
8/21/2007
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U.K. operator 3 will shake up the mobile broadband market next month when it launches cut-rate high-speed downlink packet access (HSDPA) services. The move could spark the first mobile broadband price war in the U.K. (See 3 UK Prices X-Series and 3 Plots Mobile Broadband.)

Unstrung can reveal that the operator will offer HSDPA services with speeds up to 2.8 Mbit/s for £10 (US$20) per month for 1 Gbyte of data, which will considerably undercut the offers from the second quarter, Orange UK , T-Mobile (UK) , and Vodafone UK .

Other tariffs will be a 3-Gbyte service for £15 ($30) per month and a 7-Gbyte service for £25 ($50) per month.

3 has not yet unveiled the pricing of the USB modem. One report says it will be free for existing 3 customers but will costs £79 ($156) on a 12-month contract or £29 ($57) on an 18-month contract.

According to an Unstrung Insider report, which was published in December last year, the average price for a 1-Gbyte service was $60 per month, including the modem. The lowest price in Europe was around $40 per month including the modem, says Brown.

T-Mobile's cheapest 3G laptop data service in the U.K. is $57 per month, which includes the modem, for unlimited data. Vodafone offers a 3G data service for $59 per month for 3 Gbytes; the USB modem is free on an 18-month contract and costs $118 on a 12-month contract. (See Carrier Scorecard: T-Mobile International, Vodafone Prices Data Roaming, Orange Touts 3G Data, and O2 Reports Q2.)

"Mobile operators have historically priced mobile bandwidth as a scare resource that has to be protected with high tariffs," says Gabriel Brown, Unstrung Insider chief analyst and author of the report Mobile Broadband Pricing Strategies & HSDPA. "But HSDPA changes the economics of mobile broadband by allowing more users to share each 5 MHz radio channel."

3 will also allow customers to use their HSDPA handsets as modems to connect to their laptops.

But it is not clear whether 3 will require customers to sign up for a voice tariff package in addition to the broadband service. The operator will announce full pricing details when it launches the service on September 3.

"Many people say that 3G technology doesn't allow mass market pricing for mobile broadband," says Brown. "3's new tariffs show that with HSDPA, mass market pricing is possible, although it's not yet clear if attractive data pricing will be tied to costly voice subscriptions."

At service launch, 3 will have deployed its HSDPA network to cover about 50 percent of the U.K. population, and by the end of the year, 85 percent of the population will be covered.

— Michelle Donegan, European Editor, Unstrung

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IPobserver
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IPobserver,
User Rank: Light Beer
12/5/2012 | 3:03:42 PM
re: 3 Heats Up HSDPA in UK
I'm reminded of this poll we ran in January 2007, asking how much you'd pay for mobile broadband.

http://www.unstrung.com/survey...

Out of 152 responses, 30% would pay up to $40 a month, and 58% less than $30.

But I wonder, even if these prices were available, would you really sign-up?

After all, it's yet another monthly bill to add to all those other monthly bills we have.
IPobserver
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IPobserver,
User Rank: Light Beer
12/5/2012 | 3:03:42 PM
re: 3 Heats Up HSDPA in UK
-˙10 (~$20) a month for a 3G data service would be great value.

It'll be interesting to see if it's linked to a voice plan, or if 3 will sell to anyone with a modem.
lrmobile_amby
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lrmobile_amby,
User Rank: Light Beer
12/5/2012 | 3:03:41 PM
re: 3 Heats Up HSDPA in UK
This has been available in Ireland (and other Three countries) for a while. The prices might give an indication of what the UK prices might be for same.

http://www.three.ie/broadband/...


IPobserver
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IPobserver,
User Rank: Light Beer
12/5/2012 | 3:03:36 PM
re: 3 Heats Up HSDPA in UK
There are some more user comments over on GigaOm

http://gigaom.com/2007/08/22/3...

IPobserver
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IPobserver,
User Rank: Light Beer
12/5/2012 | 3:03:36 PM
re: 3 Heats Up HSDPA in UK
Thanks Amby,

From looking at the website it seems you also have to buy their modem.

Do you know of it's been popular in Ireland?

Details of the UK offer have popped up here for pre-orders:
http://threestore.three.co.uk/...


Apparently 3 has done similar in Sweden with some success.

borracho
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borracho,
User Rank: Light Beer
12/5/2012 | 3:03:29 PM
re: 3 Heats Up HSDPA in UK
A relevant question to ask is how do you intend to use the service, regardless of the cost? I guess if you use MBA for work then $40/m paid/reimbursed by your employer is manageable while a $20/m for personal usage might still be quite high.

Any stats on user profiles (business vs. personal) and applications used on MBA?

Borracho
IPobserver
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IPobserver,
User Rank: Light Beer
12/5/2012 | 3:03:27 PM
re: 3 Heats Up HSDPA in UK
Interesting questions. We don't really have the stats youGăÍre asking about.

The poll has 152 responses G㢠it's anonymous and without methodical rigor G㢠but stillGă¬

In answer to the question, If you have a 3G laptop service, who pays for it?

* 34% said their employer has a corporate deal;
* 24% claim it back through expenses;
* 40% pay their own way; and
* 3% other

The big hope from the mobile industry has been that employers would start making 3G modems standard issue, as with BlackBerry. This is one reason operators have held off cutting prices (to see what the enterprise would swallow)G㬠but 3 doesnGăÍt have much corporate business, so there's no lost opportunity from lower prices.

I only know one person who uses HSDPA as their primary connection. Because he canGăÍt get any other service (apart from satellite), it's made a real difference and he can overlook the slow uplink and poor latency.

Likewise, if you're already connected at home and at work, and use 3G when youGăÍre out or traveling, I think you can live with the shortcomings. It's generally better than having to find and pay for WiFi, etc.

At home it's only good enough as a replacement for DSL or cable for "broadband lite" users.

For what it's worth, I find HSPA an amazing technology. With enhancements to uplink speed, QOS, and battery consumption still to come, it'll have along life.

We'll soon start seeing much more action on embedded laptop modules and Email-style devices.
borracho
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borracho,
User Rank: Light Beer
12/5/2012 | 3:03:26 PM
re: 3 Heats Up HSDPA in UK
Thanks for the info. It is interesting to see users are split almost 50-50 between corporate and private. It would be really interesting to see the 40% who pay for their own service what they use it for (access to work related apps, private email, etc.).

If you think HSPA would be around for long time combined with future enhancements roadmap, wouldn't it hurt/delay the adoption of 4G (I am thinking WiMAX)? Will it be a horse race between these two (3G/HSPA and 4G)? Well, 3G is out of the gate while 4G hasn't saddled-up yet.

Borracho
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