The 'dongle' modem allows m obile operators to offer wireless broadband that is challenging their fixed-line rivals, writes ANDREW PARKER

HAVE DONGLE, will travel. Thanks to the latest gadget, mobile-phone operators are offering wireless broadband speeds and prices that are challenging their fixed-line rivals.

Devices nicknamed "dongles", modems that enable wireless access to the internet from a laptop computer, are proving to be a significant success.

The advent of the dongle means mobile internet access is no longer painfully slow, in theory making a fixed-line internet connection unnecessary.

"We have definitely seen some customers taking mobile broadband as an alternative to fixed line," says Kevin Russell, chief executive of 3 UK.

More than 20 per cent of 3's new customers who sign up to monthly contracts are purchasing dongles.

Dongles are proving to be popular in particular with people living in rented accommodation, such as students, because they enjoy the flexibility of internet access that can move with them.

Telecommunications analysts at Morgan Stanley estimate that 50,000 people are buying the devices each month in the UK.

Besides speed and cost, the third factor driving the dongle era is the technology's "plug-and-play" format, according to Carolina Milanesi, an analyst at Gartner.

Mobile operators have been supplying wireless modems to businesses for several years, but these devices can be difficult to set up. The dongle, by contrast, simply slots into a standard USB port.

Last autumn, 3 began deploying upgraded third-generation (3G) mobile technology that accelerated its broadband download speeds tenfold.

By January, the company could offer speeds of up to 3.6 megabits per second (mbps) to 89 per cent of the British population.

In reality, however, the average speeds enjoyed by 3's customers are 1.2-1.3 mbps. The connection slows down when many people are using their phones and dongles at the same time. Speeds increase if the user is close to a radio base station transmitting the wireless signals.

However the same thing holds for fixed-line internet providers. Ofcom, the UK telecoms regulator, says fixed-line operators were offering download speeds of up to 4.6 mbps last summer.

Actual speeds could be significantly lower, at about 1-2 mbps, depending in part on how close people lived to BT phone exchanges.

Mobile operator 3 and rival T-Mobile are investing in additional upgrades to 3G mobile technology that will increase download speeds up to 7.2 mbps from this summer. Average speeds should then increase to more than two megabits per second, Russell says.

Vodafone can already offer download speeds of up to 7.2 mbps in central London and at 15 airports and will extend that capability to six more cities this summer.

Vodafone halved the cost of its basic wireless broadband deal to £15 (€19) in January to match 3 and woo consumers. Previously, Vodafone had focused its wireless broadband packages on business customers.

Vodafone UK chief executive Nick Read says it is too early to tell whether people will ditch their fixed-line internet access in favour of mobile broadband.

He adds that some better-off people are likely to retain fixed-line internet access at home and have a dongle for when they are on the move.

Christopher Fremantle, an analyst at Morgan Stanley, said in a research note last month: "Vodafone's products are now cheaper than BT's . . . with similar speeds and mobility . . . The strategic threat to BT is clear."

He predicted that in the medium term, people would increasingly swap fixed-line internet access for wireless broadband.

However if fixed-line operators invest in fibre-optic cable, they will offer customers much faster broadband speeds. Fibre should deliver download speeds of up to 100 mbps, which mobile operators cannot match.

Moreover, fixed-line broadband is often provided as part of a bundle. British Sky Broadcasting, for example, sells a "triple play" of satellite television, fixed-line broadband and phone services.

This means reports of the death of the fixed-line connection are much exaggerated, Milanesi says.