Pre pay mobile broadband services are a key component in providing revenue growth for mobile operators. Operators are introducing such services at a rapid rate, with an average of three new products being launched every month. But there remain significant national gaps in coverage. For example, Canada, the Czech Republic, Finland and Japan still do not have a PC-based pre pay mobile broadband service.

Pre pay mobile broadband services are provided without a contract term or commitment by the user. In return the subscriber has to pay the full purchase cost of the USB modem or in some cases, as an alternative, a data SIM card as a one-off fee. With a pay monthly mobile broadband service, the cost of the USB modem is subsidised by the operator and included in the monthly contract fee.

Typically, pre pay mobile broadband operators provide a range of pre pay usage packages which vary in cost according to the time duration or data allowance provided. With the pay monthly mobile broadband service, usage charges are included in the monthly rental fee. The monthly rental fee typically varies according to the size of the monthly data allowance that is included.

Pre pay mobile broadband services are composed of two main price elements. These are:

• A one-off purchase cost for the USB modem (or SIM data card).
• A one-off purchase cost for pre pay mobile broadband usage (as a top up card typically activated by SMS message).

The purchase cost for the USB modem ranges from €30 up to €100 or more. That relatively high purchase cost may be a significant deterrent to the take up of the service. The difference in pre pay mobile broadband USB modem purchase costs from operators around the world can be seen in the bar chart ranking pre pay USB modem costs. The average purchase price is around €57 Euro per USB modem across all countries.

Ranking of selected Pre Pay Mobile Broadband USB modem device costs

Source: Tariff Consultancy Ltd.

The one-off purchase cost for a pre pay mobile broadband service varies by operator and by country. Operators around the world are following different pricing strategies which include:

• Positioning the pre pay mobile broadband service as an ‘occasional use’ service, such as those offered by AT&T Wireless and Verizon Wireless in the USA.
• Positioning the pre pay mobile broadband service as a substitute for fixed line Broadband, such as that offered by Vodacom in South Africa.
• Offering low denomination top up vouchers, such as the Globe Telecom proposition in the Philippines.
• Offering a mixture of a hybrid month-to-month service, such as that offered by Virgin Mobile in the UK.
• Offering the pre pay mobile broadband service to visitors to the country like SingTel does in Singapore.

Pre pay mobile broadband services offer a range of tariffs and service bundles which typically include the following:

· A pay as you use tariff with a price per KB or per MB or occasionally a per minute tariff.

· Bundles of minutes and hourly rates, from 15 minutes to an hour, and then multiple hours.

· A bundled daily rate or multiple days rates, from two days up to 10 days or even 20 days.

· A bundle per week rates or two weeks or 15 day rates.

· A bundle per month rate typically a 30-day rate.

But the most common type of tariff offered by the pre pay mobile broadband provider is the top up data allowance tariff based on a per MB or per GB bundle and pay as you go tariffs.

From Tariff Consultancy’s survey of the pre pay mobile broadband tariff structures based on more than 150 mobile operators in this survey, the majority of plans are based on a top up data allowance, usually a per MB or occasionally a per GB bundle. The next most popular tariff is a daily flat rate tariff - for a 24 hour period - and then a pay as you go tariff, again usually based on a per MB data allowance.

A breakdown of the types of Pre Pay Mobile Broadband tariff structure provided in the survey

Source: Tariff Consultancy Ltd.

The largest Pre Pay Mobile Broadband data allowances in our survey

Source: Tariff Consultancy Ltd.

It should be noted that a number of mobile operators offer an ‘unlimited’ use tariff. For example, Swisscom allows unlimited use of its daily tariff up to a total user allowance of 10 GB in a one month period.

The analysis reveals that average pay monthly mobile broadband contracts already appear cheaper than the most common fixed broadband products in a number of countries including Ireland, Spain and Germany. But it appears that the prevalence of pre pay mobile broadband is the key determinant in increasing the penetration rate of mobile broadband services.

Tariff Consultancy forecasts that the number of pre pay mobile broadband subscribers worldwide will increase rapidly from 56 million to 337 million users from the end of 2010 to the end of 2013. Growth will come from the Asia Pacific region and also the Americas region.

The information is extracted from Tariff Consultancy’s latest report, Pre Pay Mobile Broadband Services: Pricing, Trends and Products from around the world.

For more information contact Tariff Consultancy on www.telecomspricing.com  or info@telecomspricing.com