The Wireless Broadband Business Case: Focus On Mobility
from the what-are-you-selling? dept
While it does seem like the Brand X decision should lead to more interest in wireless broadband solutions, there are still many questions not just about the technology, but the business models to support the technology. While Intel keeps pushing WiMax as a potential DSL replacement, it's not clear that's going to be the best strategy for creating a strong business model for the technology. This quick look at the business cases for WiMax points out the competing factors in creating a profitable service. According to the article, you need two things: a large under-served market and high average revenue per user (ARPU). That doesn't work if you're going after the DSL replacement market. In most areas, the market may be more mature and somewhat saturated, and especially in places with competition from cable, the prices are getting cheaper -- so high ARPUs are unlikely to impossible. The article suggests that wireless broadband providers focus on value added services like VoIP to push up the ARPU, but unless you do value decreasing things like blocking competitive VoIP people can just go elsewhere. At the same time, these high bandwidth apps cause another problem for wireless broadband solutions, in that they eat up capacity on a wireless tower -- an issue not really faced by DSL. So, what can wireless broadband do to make the case? The real answer is to avoid this mess by redefining the market away from competing with DSL. The big advantage that a true mobile broadband solution has (not WiMax -- or, at least, not WiMax for a few more years) is always-on mobility. It's the fact that you can take your broadband with you. That lets people do stuff that they simply couldn't do with their DSL connection. So, even if it ends up replacing DSL, the positioning needs to move away from just "DSL replacement" towards the additional benefits that a mobile broadband solution supplies.