It is coming – but very slowly of course, thanks to the oligopolistic structure of most mobile telecommunications markets. Bombastic new entrants such as Proxad in France may pretend that their vision of future low cost flat fee mobile data offerings will be the second coming, cutting the household bill by half in three years, but once they’ll have joined the spectrum license holder’s club there will be no incentive for them to be more aggressive than what is necessary for them to grab their share of the market. They pretend that their new hotness is a technological advantage that will be the support for their claim of costs reduction, but they forget to mention that the only reason why the old and busted competition has not pushed that technology forward is that they control the market with no need for such bother. The large incumbents have immense resources – financial, technical, human and organizational. They can be terribly powerful when they realize that they are under threat : the steamroller may take a good while to get started but you don’t want to get in the way when it begins to roll at his stately speed.

So is the new entrant the trigger ? Actually, not : the new entrant’s marketing department has just done his homework and read the signs correctly. Early adopters have from the dawn of times been clamoring for simple low cost and preferably flat fee mobile data offerings, but as usual the visionaries don’t hold much weight on a mass market – changing the game takes a large mainstream actor with his own agenda. And as surprising as it may be, that interloper is Apple. As users we may spurn Steve Jobs’ reality distortion field and the technically banal Disneyland world of Apple, but the marketing magic is awe inspiring to say the least. On the basis of it, Apple managed to get the mobile operators to produce deals that were completely unheard of on that market, including the revenue sharing arrangements that lasted until last year and the still strong absolute control of the platform by Apple. As a result of all that hype, the Iphone led the charge in mass usage of mobile data access.

Of course, mobile data access had already been possible for ages and the competitors are catching up fast on Apple’s lead in mobile user experience. But credit goes to Apple for giving the masses the taste for mobile data. Last September, “the Australian Mobile Internet Insight found that during the average iPhone browsing session, users consumed 2.07 MB compared to 0.30 MB for other mobile users“ – that is six times more ! “The report also found that the average page size for iPhone browsing is more than double the mobile average, which the report attributes to iPhone users browsing desktop versions of websites“.Last month, AT&T announced that its expectation of a tenfold usage in data traffic is driven by the Iphone. Net Applications’ February results show the iPhone generating two third of mobile web accesses. Meanwhile, AdMob Mobile Metrics report credits the Iphone with a 52% share of the traffic. Google claims that it had seen 50 times more searches on Apple’s Iphone than on any other system on the market. I have heard a European mobile operator’s executive mention Japanese studies reporting that Iphone users generate ten time the data traffic of other users. Apple’s share of the handset market will certainly remain minor, but as with any catalyzer, a small quantity changes everything.

So we have a mass market hungry for cheap data and new entrants hoping to build their market share on that. They may eventually disrupt the market somewhat, but the incumbents won’t be caught napping : IP RAN, Ethernet backhaul, IP core networks and the IMS architecture are all in the pipeline. The incumbents fully expect the new market pressure on price, and they expect to be ready to take it on. Cost of the megabit transfered can currently comfortably be counted in cents with just the fingers on your two hands, and the operator’s ambition is to cut that at least in three over the course of three years. Can you believe that mobile operators are actually shaping up to be able to compete on the price of bulk data ? You better do, but don’t hold your breath and expect mobile network operators going at each other’s throat with with generous offerings of abundant data transfer capacity while your bill plummets – the price war will play in slow motion if the history of the mobile telecommunications market is anything to learn from.

Meanwhile, SMS still costs from four to 42 times more than fetching data from Hubble space telescope…