I am heading to Barcelona on Feb. 15 for the Mobile World Congress, where operators from all over the world will talk about how great mobile broadband is, but I bet you they won’t use it to surf the Internet while visiting the show, especially if chief financial officers have any say.
The reason is simple: surfing the Internet using broadband while abroad is really expensive. Surfing the Internet using mobile broadband in Spain would cost me 40 Swedish kronor (about US$5) per megabyte, and if I wanted to do the same in the U.S. it would set me back 120 Swedish kronor per megabyte, which is a ridiculous amount of money compared to the 199 Swedish kronor per month I pay for unlimited data.
So, for what I pay per month for mobile broadband access in Sweden, I would get the pleasure of downloading almost 5MB in Spain, and if I go to the U.S. that number would drop to below 2MB.
No one in their right mind would pay those amounts. The huge difference in pricing has resulted in “bill shock” for many subscribers, according to Viviane Reding, the European Commissioner for the Information Society and Media. “It’s happened to my own children,” she said last year. “One shocking bill and they don’t use their mobiles abroad anymore.”
Instead, those who want Internet access pick a hotel that offers Wi-Fi access or sign up with a company like Boingo Wireless, which offers a Boingo Global subscription for US$59.00 per month, which gives access to 100,000 hotspots scattered all over the world.
Wi-Fi doesn’t offer the ease-of-use and ubiquitous coverage that mobile broadband does and not all phones come equipped with it.
The only thing the current pricing has resulted in is a lot of negative publicity for operators, according to Angela Stainthorpe, analyst and roaming expert at Informa Telecoms and Media. That, in turn, resulted in the E.U. bumping data roaming up on its priority list, said Stainthorpe.
The European Commission is working to put in place a €1 (US$1.29) per megabyte cap on wholesale fees, which is what operators pay each other, as of this summer.
Mobile broadband is really taking off, and the phone makers are trying to integrate applications such as social networking into their phones. But the promise of the technology will not be realized unless users can be connected anytime, anywhere.
Prices have started to come down, operators have started to offer various packages and safeguards against large bills and the E.U. has moved to regulate pricing, but more is needed. Operators still have an opportunity to take charge of this market, and in the end make more money, Stainthorpe said.
Since they will all be in the same place, perhaps CEOs including Vodafone’s Vittorio Colao, Telefónica’s César Alierta and AT&T Mobility’s Ralph de la Vega should be locked in a room in Barcelona and not be let out until they have solved the issue once and for all.