'Dongle mania' may threaten Wi-Fi hotspots

Data-card sales are set to jump fourfold in the next three years as prices come down, and they could prove tough competition for the Wi-Fi hotspot market

The mobile broadband market is hotting up with data card sales set to jump fourfold in the next three years as prices come down — possibly threatening the Wi-Fi hotspot market.

The Infonetics Research Mobility: Broadband, Phones, Subscribers and Services report predicts the mobile-data-card market will be worth $2.9bn (£1.5bn) by 2011, after nearly quadrupling in size between 2007 and 2011.

It said subscriber numbers are set to "accelerate dramatically", reaching 144 million by 2011.

This mobile broadband "dongle mania" is being driven by ongoing 3.5G rollouts (aka HSDPA networks, or high-speed downlink packet access). More generous download limits on data plans are also helping to fuel the market.

And cheaper mobile broadband may even threaten the Wi-Fi hotspot market, the report added.

Richard Webb, directing analyst for WiMax, Wi-Fi and mobile at Infonetics Research, said in a statement: "The mobile data services market is becoming more competitive, as mobile operators try to recoup their investments in 3G networks and drive up flattening ARPU [average revenue per user].

"Currently, mobile data services are generally too expensive for mass-market adoption but that will change with the increasingly extensive rollout of... HSDPA, the launch of new data plans offering increased download limits, and better subsidies for mobile data cards."

At this year's Mobile World Congress tradeshow, senior executives from the industry, such as Ericsson's chief executive Carl-Henric Svanberg, were queuing up to hail 2007 as a "breakthrough year" for mobile broadband. According to the GSM/3G supplier forum, the Global mobile Suppliers Association, there are currently 185 commercial HSDPA networks in 80 countries.

Webb said Apple's iPhone has shown the mobile industry that internet-in-the-pocket is a goer. "The iPhone has proven that if the user experience is right, users will take advantage of mobile devices for internet sessions," he said.

The analyst believes cheaper mobile data plans will encourage consumers to use data cards to download MP3s, games and video clips to mobile devices and for transferring user-generated content such as photos. A small proportion will even use a mobile data plan as their primary means of broadband access.

The total number of mobile subscribers worldwide exceeded three billion last year, according to Infonetics.