Kindly getting free mobile broadband?

The irruption of data hungry devices just as smartphones and USB dongles is challenging most mobile operators to such an extent that their networks are getting congested at some sites. As a result, carriers are feeling forced to revise flat rate plans that had seemed harmless a few years ago. End-users, who quickly got used to cheap mobile broadband plans, are not open to pay more for what they are accustomed to getting, especially given the current global economic situation.

What if they were offered a substituting free service that can modulate their data appetite? Back in May, Netzclub, the first advertising-funded mobile broadband service in Europe, was introduced by O2 Germany. In Poland a similar service called FreeM was announced last week by Belgian MVNO enabler Effortel.

One important detail is that no minimum speed is guaranteed by either of the two services. This fact allows carriers to better manage the capacity of their networks by reducing subscriber access speed should the need arise. As far as data consumption is concerned, FreeM subscribers get 500 KB or 30 minutes credit each time they view a full-screen advertisement. The operator does not specify how these advertisements are managed, nevertheless service is suspended in case no advertisement is consumed afterwards credits run out. FreeM imposes a maximum daily data consumption of 30 MB, requiring the user to browse 60 advertisements per day. Given the constant interaction with the customer that FreeM provides to marketing campaigns, customer location data is very valuable information, which actually is granted by end-users in their contract, though FreeM promises not to share the information with other companies.

After analyzing the services that are allowed within each free subscription, advertising appears not to be the only purpose of free mobile broadband; strong network protection and a customer evangelization strategy are hidden behind these services. Over time it will be very interesting to know the evolution of advertising-funded subscriber traffic compared to usage previously they joined the service, both in terms of data consumption and applications. Just in case, advertising funding is a new mode of differentiation that will foster new MVNO operation and add to the network sharing trend I analyzed in the last issue of 4G Digest.

Market analyst for Europe

Esteban Monturus is a market analyst for Europe and backhaul at Maravedis. Maravedis is a leading analyst firm focusing on disruptive technologies including smart networks using WiMAX, IEEE and 3GPP/LTE.