2/5/2008 6:36:00 PM
USB success hits home broadband
Mobile operators are making significant inroads into the traditional broadband market, thanks to USB dongles.
City experts say USB dongles are growing in popularity – sometimes at the expense of landline broadband services and even home Wi-Fi.
A briefing note this week from a major investment bank downgraded its forecast for BT’s earnings per share because of the damage to the fixed-line market by USB dongles.
In a note entitled ‘broadband substitution’, it cited the Austrian market, where consumers are ditching fixed-line broadband in favour of datacards and dongles.
Tom Smith, EMEA research manager at Universal McCann, said: ‘Wi-Fi networks outside the home have been dogged by patchy service, expensive costs and confusing tariffs.’
Others have complained about cumbersome installation and customer service problems.
Dongle providers are upping production to meet demand. In 2006, just over five million USB dongles were manufactured globally. That figure is forecast to reach 68 million by 2011 as prices fall.
Chinese company Huawei is responsible for making more than 80% of Europe’s USB dongles.
A spokeswoman for Huawei, said: ‘We are seeing demand for our product increase steadily all the time.’