All sorts of new “connected device” opportunities are available to mobile service providers beyond voice and data service to mobile phones. Service providers have achieved some notable success selling mobile broadband service for notebook PCs, mostly to support business users.
Services for all sorts of “machine-to-machine” apps are the next big frontier, and tablet devices represent a sort of half-way category of products, with less demand at the moment, but probably not as much incremental demand in the long term as M2M.
The reasons have to do with end user willingness to spend and the use case. For starters, most tablets are used inside owner homes. They are untethered, but not “mobile” products, so can use the same Wi-Fi people in place for their PCs. Mobile phones inherently are mobile products, and require full mobile support. M2M apps might be fixed, rather than mobile, but will require new connections.
Tablets, though, are also likely to remain a product category that drives only some incremental mobile access demand, for reasons related to retail pricing. Most users, knowing they use their tablets mostly in home, at the office or other locations where there is Wi-Fi connections available, instinctively know the additional value of a mobile broadband connection is relatively low.
That might change as mobile service providers alter the packaging of mobile broadband so that the incremental cost of tablet mobile broadband is more in line with the perceived incremental value.
During 2011, some 33 percent of all tablets sold globally had the ability to use mobile broadband networks natively, according to ABI Research. According to Chetan Sharma, only about 10 percent of all tablets in use actually used mobile broadband networks.

That illustrates both the tablet upside and challenges for mobile service providers. Mobile phones have little value without a service. Tablets likewise have little value without Internet connectivity, but can use any Wi-Fi connection to do so.

In other words, tablets are more naturally suited devices for mobile broadband services than desktop PCs, perhaps only slightly less well suited for mobile broadband than notebook PCs, but not “naturally connected” devices such as mobile phones. U.S. mobile data generated $67 billion in mobile data revenues in 2011, accounting for 39 percent of the overall revenues. For 2012, Sharma expects mobile data revenues in the U.S. market will reach $80 billion.

That is one reason retail mobile stores always sell phones, sometimes feature tablets, but never try to sell PCs, though some have tried to bundle notebooks and mobile broadband services.

That might change, marginally, once more service providers decide to sell mobile broadband plans the way that fixed network providers sell their broadband connections. Essentially, fixed broadband with local Wi-Fi inherently supports multiple devices on a single account.

Tablets won’t become more interesting for mobile service providers until the equivalent “family data plans” are available.

Join the Conversation

Leave a Reply

Your email address will not be published. Required fields are marked *

Don’t Miss Any of Our Content

What’s happening with broadband and why is it important? Find out by subscribing to Telecompetitor’s newsletter today.

You have Successfully Subscribed!