Flat-rate mobile web access 'doomed'

Pricing for mobile internet access is moving from flat-rate to subscription-based access

The prospects for uncapped internet access via mobile phones look to be dead in the water, according to analysts.

The industry will instead move towards variable quality service offerings, with low grade access for basic voice calls but the option to pay for upgraded services for high quality applications like TV or video conferencing.

"Industry pricing is moving from flat-rate to subscription-based access," said Bernt Ostergaard, research director for business telecoms services in Europe at Current Analysis.

"The idea of unlimited bandwidth is ludicrous. The normal distribution of customers shows that there are always around five per cent of bandwidth hogs, and carriers want to nip those users off."

Taking the PC industry as an example he pointed out that the demand for bandwidth is huge but that services like IP television or videoconferencing need guaranteed bandwidth if they are to work with acceptable quality.

But some in the industry disagree, pointing out that the way end users try new things with unlimited bandwidth is an important way to identify new services that can be used to grow revenue.

"The industry is not doing a good service in pushing users off because they are trying new things," said Marc Rotthier, vice president of network and service provider business in EMEA at HP. "Rather than trying to cut it we should see it as a new revenue opportunity."

Rotthier used the example of 3G phones that were sold with unlimited calls. In some cases parents were using them as baby monitors, leaving the call on 24/7 so that they could listen to their child.