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T-Mobile joins 3 UK in prepaid mobile broadband race

Mobile data sector moves to new revenue streams

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T-Mobile UK has announced a range of prepaid mobile broadband options that come with a USB dongle for a laptop, taking on the wildly successful similar offering from 3. This move also shows how the mobile data sector is changing quickly to support new revenue streams and new breeds of users for the hard pressed cellcos.

As western European cellcos extend and boost HSDPA coverage, they can support fully-fledged mobile broadband services, and the heightening competition is also pushing them into new rates and plans. Once seen as premium offerings to encourage users to take up additional contracts, now the operators are taking data and broadband into prepaid territory. 3 UK was one of the first to offer pay-as-you-go dongles, and they have been rapid sellers, attracting new customers to 3, even those tied to a voice/basic data contract elsewhere. Now T-Mobile is taking a similar stand, offering an ‘unlimited’ data allowance (subject to fair usage) in the home market. There are three tariffs, starting at £2 per day, £10 for a week and £20 for 30 days. The USB stick costs £49.99 (just under $100).

So whereas the prepaid market in voice was, initially, largely associated with teenagers or low-income customers, in data it can be a way to poach the highest-value mobile base – power notebook users and business travellers.

Richard Warmsley, head of internet and entertainment at T-Mobile UK, said: "We've seen massive demand for mobile broadband from a range of people, so we're creating ways for customers to only pay for days they actually need. T-Mobile intends to make it as easy as possible for new customers to join the mobile broadband craze that is sweeping the country and to help with this we will soon be stocking our range of packages in a variety of new outlets such as supermarkets and popular high street stores."

While mobile-only 3 as well as O2 have been positioning notebook mobile broadband offerings as replacements for fixed broadband, T-Mobile is not going this far, and says it is targeting its new options as a complement to home fixed services. In a recent poll for telecoms.com in the UK, 35 per cent of respondents believed the complementary approach was right, while 26 per cent saw mobile options as a “clear threat” to landlines, and a similar percentage did not see dongles and phones replacing fixed broadband at all. The remainder (9 per cent) were sceptical about there being any such thing as real mobile broadband.

Copyright © 2008, Wireless Watch

Wireless Watch is published by Rethink Research, a London-based IT publishing and consulting firm. This weekly newsletter delivers in-depth analysis and market research of mobile and wireless for business. Subscription details are here.

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