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Watch out for unlimited LTE - the single play

LTE tower

via Flickr © Bytemarks (CC BY 2.0)

Fixed line operators had better watch out, according to gung-ho mobile competition advocates, Finland-based Rewheel. The consultancy says LTE wielding operators have it in their power (and within their theoretical network capacities) to provide unlimited mobile broadband as an alternative to unlimited fixed access services. And in some parts of Europe they’re already doing so.

Cablecos without a cellular arm should be afraid.  

According to Rewheel’s latest advisory, “4G LTE smartphone plans with 100 or unlimited gigabyte volume are [being] promoted by European mobile operators as the ultimate packages for connecting computers and tablets and streaming movies while at home.”  It points out that in competitive markets in Europe pricing for data volumes can be set so low as to make ‘one service fits all’ a viable option.

“In Finland the average LTE speed is 17Mbps,” claims Rewheel’s Antonios Drossos. “In my home in Helsinki I get 30-40 Mbps and I am on a peak 50Mbps 4G LTE for €24.90 unlimited volume. I do on average 60-80  gigabytes per month!”

One European fixed and mobile incumbent, Telekom Slovenia, has even explicitly launched LTE-based IPTV set top boxes for televisions in the home.

So while in theory the triple play - in some markets at least - could become a single play with mobile broadband, voice, and video all wrapped up across LTE in a single deal, most telcos currently price to keep their services very separate. They effectively offer high-priced data for mobile applications, using caps and high incremental charges when users go above; lower pricing per gig for fixed services. That might give the hybrid fixed/mobile telco the maximum take today, but in competitive markets there may come a point where one operator can offer a near unlimited deal to cover all services.

Then the fun might start, and the first to lose out could be the cable operator.

But what about capacity? How can the network support the practically unlimited usage demanded by video?

“We are not saying that mobile will fully replace fixed,” says Rewheel’s Pal Zarandy. “What we say is that it is a ‘good enough and cheaper alternative’ for a growing share of the market.”

It’s all very well selling unlimited access across an under stretched network, I point out, but if the unlimited offer is picked up by enough households in a given area, won’t speeds slow?

“If the MNO keeps densifying the grid with small cells in the hottest areas, then performance will not suffer.”

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