Sky and TalkTalk are losing out on potential monthly revenues of up to £36 million and losing ground in the UK broadband market to rival internet service providers (ISPs) by not offering a mobile broadband service, new data reveals.
The expansion of the mobile broadband sector into a market worth £36 million per month is borne out by inustry experts' estimates that around 200,000 new connections are established each month. Top 10 Broadband calculates that with the average contract priced at £15 per month over 12 months, the average charge per customer is £180. This equates to a monthly pot of available revenue for ISPs of around £36 million.
According to Jessica McArdle, marketing manager at the broadband price comparison site, the negative effect this is having on Sky and TalkTalk is two-fold. While both companies are adding customers from the still-growing home broadband market, they are missing the chance to capitalise on the lucrative mobile broadband sector which is expanding significantly faster.
What is more, she added, they are allowing companies like 3, T-Mobile and Vodafone, who dominate the area, to steal market share and are even losing out to more recent entrants to the market such as Virgin Media and O2. This is because by not offering a mobile broadband deal they are effectively forcing existing and potential new customers to go elsewhere.
Ms Jessica McArdle is confident that the sheer size of the market and the competitive advantage that Sky and Talk are currently handing rivals makes it inconceivable that they are not considering launching a major mobile broadband offering of their own this year.
“TalkTalk and Sky must be looking into ways of offering mobile broadband either as a standalone product or as part of a bundled deal – failing to do so would amount to commercial suicide”
The rapid expansion of the mobile broadband market was highlighted by sales figures from the site. During October last year, 32 per cent of sales were accounted for by mobile broadband deals, rising to over 50 per cent in January 2009.
This meant that January marked the first time ever that mobile broadband sales had exceeded those of home broadband. In January 2008, mobile broadband accounted for just ten per cent of sales, indicating how fast the market has developed.
Industry experts expect mobile broadband to grow even more markedly this year. Tim Lord, regulatory director for Hutchison 3G UK, recently told the Digital Britain seminar that as services that allow people to access mobile broadband expand, take-up among consumers will in turn be boosted.