That Gigabyte Phone Will Cost You

Nokia Siemens Networks (s nok) (s si)  today released data showing consumer spending on mobile broadband in Europe is up 40 percent from a year ago, driven primarily by more people signing up for the services. The data covers HSPA+ networks in Spain, Germany, the UK and France, but should act as a decent barometer not only for demand for mobile broadband, but also the bite it will take out of consumers’ wallets. In short, the demand for data, or what Om yesterday called the Gigabyte phone, won’t come cheap. That’s good for carriers, and is even good for consumers who are willing to trade higher broadband costs for mobility.

The Nokia Siemens data offers a snapshot of usage trends that corroborate the idea that consumers with faster networks tend to use them for more data and might even use the faster broadband to replace their wired broadband:

  • More than half of mobile broadband users (58 percent) are interested in high-speed mobile broadband or LTE.
  • Of those interested, 30 percent are willing to pay a premium for LTE’s faster speeds.
  • About 50 percent of users access mobile broadband on the go, and one in five fixed users want to move to mobile broadband.
  • Four out of five mobile broadband subscribers use their mobile broadband subscription from home
  • Almost a third of users (31 percent) said they intend to spend more time accessing the Internet via mobile broadband.
  • One in four people who aren’t using mobile broadband would like to.

The data also shows that smaller devices are both powerful enough to meet the need for performance on phones or tablets/netbooks, but also that mobility is part of the Internet experience: people don’t want to lug around laptops or bulky machines. Two-thirds of users access mobile broadband from devices smaller than laptops, according to survey.

This type of data indicates that cord-cutters won’t remain limited to a pay-TV and wireline phone phenomenon, and that we’re likely to see some folks replacing wired connections with mobile broadband. That’s something I have mixed feelings about, but it would also help folks afford what will ultimately be a more expensive on ramp to the Internet. For those pondering what a shift from wired to wireless broadband means for video in particular, come to our NewTeeVee Live event next week in San Francisco to hear executives from Motorola (s mot) and Adobe (s adbe) speak on the topic.

Despite the changes happening today in mobile broadband that make 3G access cheaper, as 4G networks roll out, operators are cutting off flat-rate plans and switching to pricing schemes that will cost more on a per gigabyte or per megabyte basis. The reasons? Network operators need to generate revenue to pay for their network upgrades, but also because wireless networks have very real capacity limitations and carriers are trying to price mobile access with an eye toward controlling how much traffic is running through their thinner mobile pipes.

So today, consumer spending on mobile broadband is up in Europe because more people are signing up for convenient access to the web at decent speeds anywhere they are. But that spending will continue to rise as operators try to tamp down demand by making sure heavy mobile usage remains a luxury. So how much will that Gigabyte phone cost you a month?

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