Wireless Broadband: The Next, Cheap Wave?

Business Week covers Verizon's recent price cut for its high-speed mobile internet service and takes a look at the potential market in the U.S.

With the entries of Sprint and Cingular to the 3G playing field, Albert Lin at American Technology Research said, "To remain competitive, Verizon needs to build a greater gap between themselves and competitors."

Lin estimated that "only about 1 million, or some 2% of the company's 47.4 million subscribers, use EV-DO to connect their laptops to the Web" and predicted "the service's growth rate should double in the next year as more users take advantage of the lower price."

He added that "with a further decline in prices, to around $40 a month, even the mainstream consumer will jump onto the wireless broadband bandwagon." Lin also noted that "at $80 a month, its EV-DO service was too pricey even for some business users. Also, Cingular is likely to prove a tough competitor once its broadband service is more widely available."

Jeff Kagan an independent telecommunications analyst said, "The prices are now low enough that this service is starting to get interesting." Kagan even suggested that "if prices continue to drop, most wireless users will opt for faster broadband access instead of alternatives such as digital subscriber line (DSL) connections."

That might be pushing it. With DSL at only $14.95 a month, it will be a while before the wireless carriers drop prices for their broadband networks to this level. And as I've said many times in the past, pricing will need to drop a lot further ($30 range?) before mainstream adoption kicks in...