Swedish Service Providers Just as Restrictive as the Rest
Sweden has a reputation for being a very open and tolerant country, but it’s not only U.S. service providers and device manufactures who are trying to block VoIP traffic (see my colleague’s blog on this topic). Last Friday I read an article in a Swedish newspaper about data usage in wireless devices and how it affects service provider revenue. Just like their North American counterparts, Swedish service providers fear becoming simple data pipe providers, which means reduced revenue streams and competition with local ADSL/bit pipe providers.
Is carrier reaction a surprise? No. Today mobile broadband access in Sweden costs approximately $10 (for download speeds of up to 2 Mbit/s and uploads up to 0.384 Mbit/s) or $30 (downloads up to 10 Mbit/s and uploads up to 4.6 Mbit/s). I can assure you that the speed you get from these “Smart Turbo3G-modems” is amazing, especially in the larger cities. During 2008, the average download per user was approximately 2GByte of data per month. Since data traffic continues to increase, service providers will soon need to invest in extra network capacity. Two years ago, a service provider earned $380 per GByte, but today that revenue is down to $25 for the same amount of transferred data.
Data traffic in Sweden increased fivefold from 2007 to 2008, and today 877,000 people (1/5 of all active broadband subscriptions) use 3G mobile broadband as their main broadband provider. Over the same time period, data revenue has only increased 76% due to monthly fixed fees. This is all the more interesting because it seems like no one uses MMS anymore (at least no one I know. It is really just an expensive way of sending an image, and is so much cheaper to just send an email).
To solve the paradox of decreasing revenue and increasing data traffic usage, service providers are trying to block VoIP and other non-revenue generating data traffic. There are several examples of such behavior from large operators such as T-Mobile. In the article mentioned above, the Swedish PTS (Post and Telecom Agency, which is like the Swedish FCC) is seeking the authority to stop any service provider that tries to block VoIP usage. PTS states that service providers should not be allowed to manipulate traffic, and that users should be able to freely access any content without service provider interference. Niclas Lundblad, European Policy Manager at Google agrees, stating, “PTS is doing the right thing. This really fosters innovation in the networks.” Unfortunately, PTS does not currently have the authority to stop service providers until the EU takes a general decision about these regulations this fall.
So it appears as if service providers are again attempting to obstruct innovation and development instead of finding a viable business model that would allow them to generate more revenue from data traffic.
Tags: mobile VoIP, PTS, service providers
