Analyst Angle Special Edition: 4G mega buckets are causing European fixed broadband operators a few sleepless nights

Just when European fixed operators thought they had seen off the threat of fixed-to-mobile broadband substitution, some, mainly in Nordic markets, are encountering new mobile services that are genuinely substitutive again. 3G mobile broadband has looked increasingly unviable as a mainstream competitor to fixed broadband; low, static average usage levels and poor customer satisfaction levels bear this out. However, those mobile network operators (MNOs) with 4G, awash with spare capacity, are now marketing ‘mega buckets’ of data (up to 30 Gygabytes per month) offering speeds of ‘up to 100 megabits per second.’ If we assume for the time being that realistic speeds are about one seventh the theoretical maximum, then these look like real equivalents of an ADSL2+ service.
Figure 1 compares the retail price per GB of selected top-end European 4G services, with top-end 3G services in Denmark and the larger European markets of France, Spain and the U.K., where 4G is not available. In Denmark, where 4G services are available from one MNO, prices for 3G mobile broadband packages have fallen fast and now look starkly different from where they were a year ago and from those of most 3G players in countries with no 4G.