2013: The year mobile data stops being profitable


December 22, 2011 , ,

The EU has unveiled plans that aim to slash the cost of accessing data services while abroad from their current levels of £2.00 per megabyte of data to 80p by July 2012 and then just 45p by July 2014. However, this has led to fears that by 2013, mobile data will no longer be profitable and this sound the death knell for many mobile carriers.The current problem for consumers is that even if they have unlimited mobile broadband at home, the cost of accessing data services will rocket as soon as they travel abroad and have to access another mobile group’s network.

Many consumers will have noticed that when travelling to Spain, for instance, their mobile provider will change to either Telefonica or Movistar. When they then try to access these carriers to update their Facebook accounts or Twitter feeds, probably the most common uses for mobile data, they will be charged through the nose for doing so.What the EU rulings have proposed is that consumers should be given the option to sign up for specific ‘roaming’ contracts that are specially designed for use in other countries. These secondary services should run concurrently with their ‘home’ contract and use the same phone number and SIM card. The hope is that this will open the market to more mobile operators who will be able to offer more competitive ‘roaming’ packages, giving consumers more choice and, thus, bringing the cost of data services down.

All of which sounds great but, even under the new proposals, a three-minute song downloaded from iTunes would cost around £5, while a ten-minute, low-resolution YouTube video would cost around £20 to watch, which is probably more than most people pay for unlimited mobile broadband, unlimited voice calls and unlimited text messages whilst at home! And any situation whereby the cost of downloading a song is greater than the cost of the song itself clearly needs addressing.However, mobile data carriers are concerned that such measures will simply price them out of existence. Telecommunications vendor Tellabs, for example, has suggested that by early 2013 the cost of delivering one gigabyte of data will have surpassed the price that carriers are charging.

So the cost of mobile data is something of a double-edged sword for consumers. On the one hand, they will be getting cheaper data packages that will make it more cost effective to access all the mobile services they would normally access at home. On the other hand, if this demand for mobile data ends up bankrupting mobile carriers, then this will shrink the market even further and carriers will have no option but to put up the prices again or go to the wall.

And this is also a problem for the EU and their proposals as, while they are trying to open the market to more providers to increase competition and bring down the cost of roaming data services, they could have the opposite effect of putting carriers out of business and, therefore, narrowing the market even more. This, inevitably, would lead to higher prices being introduced once more.

Furthermore, does the end justify the means if the cost of roaming data services is only going to come down to, a still massively inflated, £5 per gigabyte?

What is certain is that something will have to be done over the next 12 months or we could face a worldwide collapse in roaming data services.


24 thoughts on “2013: The year mobile data stops being profitable”
  1. Paying for roaming data is one thing. What this country desperately needs is affordable mobile broadband with realistic bandwidth allowance. I was recently offered ‘unlimited’ 3g mobile broadband at a very good price. I almost purchased it when I noticed in the small print a 1 gig/month fair use policy! 1 gig is nothing nowadays.

    Happy New Year – May your blog go from strength to strength

  2. Good article, I’m all for the data charges going down, but I certainly don’t want a worldwide collapse in roaming data services. I was having a hard time deciding what to buy myself this Christmas. A new phone with a good mobile connection was something I’ve been wanting to get for a long time now.

  3. Hi Shanen! I think everything will be alright. Phone networks have good business people with them, they will not go bankrupt but will have other ways to earn from conumers. That’s the way it is always, that why these companies are so rich. Advance Happy new year and more power to lawmacs.com!

  4. Happy holidays Shannen! Mobile carriers always complain when new potential government legislation could pass the house. These same carriers have adapted to change in the past and I’m sure they will again in the future. It’s just scare tactics.

  5. Hope it won’t happen, you may lost contact with our love ones abroad..

    There’s no chance to get in touch with them than using roaming.

  6. Hope it won’t happen, you may lost contact with our love ones abroad..

    There’s no chance to get in touch with them than using roaming.

  7. yeah it might be possible that ir would become common and wouldn’t have much value. wen previously when web hosting was introduced for free, it had good value and now there are so many free web hosting provider and it become common. So it become normal one.

  8. The issue, although widely regarded as being a drop in tariff prices and consequently a loss of mobile carriers is quite possibly only the tip of the iceberg. The EU’s stance on this is in effect potentially damaging to UK, French and German based Companies, all of whom have a monopoly on International markets Pan European. However, I suspect that this will be quietly burried as something that is offered (when one asks for it) rather than implied as an alternative. Other solutions to drive revenue may arise, such as advertising. However, the operators have over the past few years been cutting back in cost saving excercises, using such tactics as site sharing and roaming contracts to imporve coverage and reduce overheads.

  9. I do hope that this would not be happen and face such situation. And hope this would not affect the global communication. Thanks for the very informative discussion.

  10. It might be possible. People will find ways to save more and since mobile data services are becoming expensive every day they might turn to other alternative like the internet. Nice post.

  11. They educate their clients about the trusted websites who has transparent terms and conditions and acceptable relevant information concerning the phones. A good website takes care of their customers instead of misleading them. Today you find a lot of mobile phones from several manufacturers with various applications and operational capability.

  12. If only this mobile data idea would come sooner! An interesting take on the subject of mobile data prices especially since its such as hot topic in the US right now.

  13. I visit France from the UK on a regular basis (5-10 times per year) and have always had an issue with mobile roaming charges whilst in France – which I consider to be profiteering on a grand scale by the telecom companies. There is no reason for roaming charges to be as high as they are and I welcome any substantial reduction.

  14. Thanks for such an important posting, really everyone should start thinking as well as worrying about this matters,If this charges will not stop then people will avoid to spent more moneys for mobile facility.

  15. In my opinion, i think roaming services will collapse in the near future since nowadays there are a lot of WIFI spots and most of our mobile phones have the ability to connect to the internet. Calling someone from abroad is no longer that difficult and expensive due to skype and other voice calling software.

  16. As of now we are enjoying the great benefits of mobile gadgets, their accessibility that gives people manage things within their hands and because of this people are mainly dependent on it. And for sure it would be hard to adopt when these innovation falls down. 🙁

  17. Since we are living in this world where human thinking is at its peak, surely there will come a time when roaming data services will collapse. It is because lots of gadgets and even sites give free charge when calling you are calling someone overseas.

  18. This is good news. A lot of the networks in Europe don’t make it clear to their customers about data roaming charges.

    If you’ve read any sort of news recently, you’ll have heard of one of the stories of somebody watching a film whilst on holiday and coming home to a huge bill. It’s about time somebody got this under control!

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