Wi-Fi won't replace mobile broadband

Mobile broadband is expected to weather the economic downturn because it is becoming mainstream, with Wi-Fi hotspots not posing a significant threat, according to analysts.

Daryl Schoolar, senior analyst, wireless broadband at In-Stat, said in an interview with ZDNet Asia, he doesn't expect mobile broadband usage to take a big hit because it is becoming a mainstream commodity.

"A lot of laptop data card subscriptions are paid for by businesses, so I don't expect that to be affected. Businesses may look for other areas to cut cost. Connectivity is indispensable," Schoolar said, but added that consumers and SMBs may think twice about signing up for new contracts.

According to a recent Parks Associates study, the mobile broadband market is expected to weather the economic downturn because it is "transitioning into a mainstream service".

The study projects the number of U.S. mobile broadband users to more than double between 2008 and 2013.The research firm expects mobile broadband reliance to be increased by sales of smartphones throughout the period.

Mobile broadband is expected to continue to prosper in spite of Wi-Fi hotspots being "very popular" in the United States. Schoolar said operators such as AT&T offer bundled services such as free Wi-Fi connectivity at hotspots for their existing DSL or iPhone subscribers, so this helps to prevent Wi-Fi and cellular broadband from being two competing services.

Operators in Asia are adopting similar tactics. Bryan Wang, research director, Asia-Pacific connectivity, Springboard Research, said in an e-mail interview with ZDNet Asia, China Mobile has bundled 10 hours per month of Wi-Fi usage with the upper-tier cellular broadband subscriptions.

Wang said there is a possibility some corporations may consider Wi-Fi as an alternative to curb spending on mobile broadband, but noted that in countries like Singapore, Hong Kong and Taiwan, there is consumer momentum to switch over to 3G cellular broadband from current fixed broadband services.

"China Mobile uses both to provide comprehensive coverage for customers," he said, but added that "we see the trend of consumers moving to cellular broadband, as well as business users".

He said: "Cellular broadband is not necessarily more expensive than fixed broadband... This has been happening in the past six months for non-gaming consumers, who just need to surf anytime, anywhere."

Free is not good enough
One trump card mobile broadband has over Wi-Fi is ubiquity, said In-Stat's Schoolar. "Out in the field, hotspots are not an option," he said.

"It's a tough market for Wi-Fi operators. They have to branch out and provide other services than just selling access, [such as] running a managed LAN service, for example, or tying up to control valuable real estate like airports and business hotels," he added.

Wang said: "Wi-Fi coverage is still an issue for most countries."

And bundled offers from operators giving home users fixed broadband and cellular data could "kill" paid Wi-Fi hotspot services, he said.

In the United States, AT&T sells a data plan together with its iPhone, as does T-Mobile with its Android-based G1 smartphone, said Schoolar.