3 Heats Up HSDPA in UK
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