UK : “The Ofcom report uncovered a real surge in the use of mobile broadband after a big marketing push by mobile phone companies selling dongles.

According to the Ofcom report, two million people say they have used mobile broadband via a dongle or similar device and three quarters of them say they use it at home as well as on the move. The result: 511,000 new mobile broadband connections between February and June 2008. All this is evidence that mobile operators are beginning to compete with fixed line broadband.

“However, whilst the increase in mobile broadband could be regarded as great news for mobile operators, the reality is less enticing. The increase in the use of dongles shows that consumers are bypassing the handset environment, effectively turning the mobile networks into bit pipes.” Says Hugh Roberts, Senior Strategist at Patni Telecoms Consulting. “It’s really a vote of no confidence in the mobile industry – the operators aren’t doing their jobs. Where’s the value add to enable premium ancillary services for the mobile networks? Well publicised subscription-based (predatory) all-you-can-eat pricing is driving take up and indeed is encouraging FMS (fixed mobile substitution), but many of these packages will not be giving as good a margin on network capacity utilisation as other offerings, particularly if customers are able to use VoIP directly from their PCs.

“This is a simple, compelling, well priced, and non-convergent offering. It reflects the fact that customers understand and trust their PC environment, and also its ‘standards’ and ease of use for interconnectivity/interoperability. They don’t trust the mobile handset and its awkwardness of use (with the possible exception of the iPhone… I wonder how many iPhone users also have dongles?!). Dongles appear to have gained acceptance – particularly when well priced - by consumers because they are simple and the perception is that the mobile environment still maintain elements of 'walled gardens' that most mobile operators continue to refer to as the Internet. With a dongle, users can retain their trusted laptop experience.”