Business

Telecoms expect half of population on mobile broadband in 2014

BY STEVEN JACKSON Business writer jacksons@jamaicaobserver.com

Wednesday, May 21, 2014    

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TELECOM players expect half the population on mobile Internet by year-end, with investments projected to be over $14 billion in anticipation of that demand.

It represents a new era in mobile, the switch from voice to data.

"We would expect over 50 per cent of mobile subscribers to be using mobile broadband by the end of 2014. Presently, the percentage of customers using mobile broadband is approaching 45 per cent," stated Barry O'Brien, CEO of Digicel, the largest provider, in response to mailed Business Observer queries. Digicel, with around two million subscribers, invested some $6 billion on its 4G network last year to facilitate mobile surfing.

That investment comes to consumers in cheaper plans, about $50 a day for surfing, and also cheaper smartphones. In fact, Digicel said that some 200,000 new mobile subscribers jumped on its network over the last quarter and that it sold 90,000 branded Digicel smartphones.

"For LIME, we continue to experience a strong wave of customer preference for broadband-on-the-go, due mainly to their changing lifestyles and demands," stated Elon Parkinson, LIME's spokesman. "There's every indication that mobile broadband will continue its rapid evolution towards becoming a standard feature of everyday life. Our customers expect high-speed data connectivity everywhere and we have embarked upon a US$79-million network upgrade and expansion to accommodate anticipated demand."

LIME reasoned that its mobile data revenues "doubled in previous years".

Recently released Economic and Social Survey Jamaica (ESSJ) data indicates that Jamaicans with high- speed internet jumped by 641 per cent from 120,000 in 2012/3 to roughly 920,000 in 2013/4 fiscal year. The main cause for the rise relates to mobile broadband which jumped to 786,000 in 2013/4, as it was the first year that such data was collected in that category.

The shift from voice to data will affect revenue for Digicel, while LIME remains more optimistic.

"Yes, there is a global trend whereby subscribers are moving some of their spend from voice to mobile broadband and Digicel is not immune to this trend. However, we have minimised the effect by continuously increasing the value on voice we offer to our customers from promotions," stated Digicel.

Stated LIME: "As mobile broadband usage is on the rise with social media, web browsing, video and chat driving heavy consumption of data, we believe that the shifting consumer preference will generate additional revenue for the business as evidenced by the doubling of mobile data revenues in previous years."

In March, both providers told the Jamaica Observer that they would allow the pending release of the voice call feature on WhatsApp's messenger service. The service would allow an unprecedented number of Jamaican mobile users to make free calls outside a mobile providers network. The cell providers cannot block the service on Wi-Fi networks, but can by interference regulate the service inactive once it goes over their respective networks. Skype, which connects mainly with user identification, and WhatsApp rival LINE already offer free voice calls. But WhatsApp is so heavily integrated with mobile that it could impact greater on voice revenues.

The Office of Utilities Regulation, in its latest Quarterly Report for Telecommunications Sector Entities, indicate that smartphones aided the 165 per cent rise in mobile data revenue to $1.19 billion in the first quarter 2011 over year earlier levels. The regulator discloses dated statistics ostensibly to protect competition. However, the rise occurred during a period of flattening revenue, earned via voice calls at $5 billion year-on-year. Voice calls, however, still account for the major part of total mobile revenues at some $7.1 billion for the quarter.

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