Wireless data prices fall, usage booms

Mobile data traffic ramped up between four- and eightfold in 2007 thanks to the knockout combination of dramatically decreasing prices and faster network downlink speeds, according to a report from Heavy Reading.

The surge in data traffic is extremely good news for operators, but the challenge they now face is how to withstand the reductions in data prices without destroying their business models and becoming mere bit-pipe providers.

In 2007, an eightfold increase in data traffic compared with 2006 levels was common for mobile operators that introduced competitive flat-rate data plans and weren't carrying much data traffic prior to the deployment of HSPA (High Speed Packet Access) technology, according to the report, "Flat IP Architectures in Mobile Networks: From 3G to LTE."

For operators with a lot of pre-HSPA 3G data traffic and without competitive flat-rate data plans, three- and fourfold increases in data traffic in 2007 were common.

Gabriel Brown, Heavy Reading senior analyst and the report's author, says it' is "no wonder that data usage is growing because performance is getting better and prices are coming down. 2007 was the breakthrough year. You're getting 1 Mbit/s to 2 Mbit/s downlink routinely, and prices have come down massively."

According to Brown's report, data traffic volumes at Telefónica O2 Europe plc doubled every quarter in 2007 after it launched a one Euro ($1.59) per day flat-rate service using USB modems in Spain. And T-Mobile International AG recorded a 57 percent increase in 3G data volumes in the third quarter last year compared with the previous three-month period.

Brown stresses that the increase in mobile data usage is primarily due to lower tariffs -- prices declined more than 300 percent in 2007, according to the report.

Now operators have to decide how low they can take their prices, and how they deal with the impact of the data surge on their business plans and strategies. "Mobile operators are essentially becoming ISPs," says Brown. "They are going down the bit-pipe road. They don't want to do that, particularly, but what should they do?"

In Europe, the price competition is most aggressive in markets where 3 Group is present, such as Austria, Italy, Sweden, and the U.K. 3 shook up the U.K. market in August last year with a £10 ($20) per month offer for a USB mobile broadband service.

The operator is reportedly ready to cut that offer by 50 percent to £5 ($10) per month.

Original article

Vodafone offers Facebook to UK users

Facebook took a new step into the mobile realm on Thursday, launching a platform for operators designed to make its social networking application work better on portable devices.
Vodafone is the first operator to use the Facebook for Mobile Operators platform and has started services in the UK and Germany, said Jed Stremel, Facebook's director of mobile division. Vodafone will soon expand the program to Greece, Italy, Spain, Ireland and Portugal.
The platform involves giving operators a set of technical specifications intended to resolve some of frustrating hang-ups when using Facebook on a mobile phone rather than a PC, such as smoothing out login problems and opening up other features, Stremel said.
The move by Facebook, which ranks next to MySpace as one of the most popular social networking sites, is intended to grow its user base, which the company estimates at 64 million users. So far, the company says it has six million users of Facebook Mobile, an unsupported mobile version of the website that will now get full support, Stremel said.
At the moment the mobile site does not have any advertising. Stremel would not reveal the financial details of Facebook's deal with Vodafone, although he said operators will be able to generate revenue from data services as their subscribers access Facebook.
The long-term hope for social networking sites is rich online advertising revenue. Facebook, which has an exclusive deal with Microsoft to place ads on the site, also did not say when it would put advertising on the mobile site.
The company is hoping to lure more operators by the simplicity with which they can enable Facebook, Stremel said.
Facebook has created special web pages with instructions on how operators can set up their systems, he said. The instructions, for example, let operators add system settings that will let their subscribers send MMS (Multimedia Messaging Service) with photos or video to their Facebook profiles, Stremel said.
The platform also includes other specifications designed to stop abuse of Facebook, such as spamming, Stremel said. When someone sends their first MMS with a photo to their profile, the user is sent back a confirmation message with a code or a link. That confirmation then links that person's phone with their Facebook account, Stremel said.