Is this the end for landlines?

Customers of telecoms giant BT were reeling earlier this month as the company introduced a succession of price increases. It added 75p to line rental for its paper bill customers; increased daytime calls for BT Option 1 and 2 customers from 3.25p per minute to 4p; and tripled the cost of evening calls for Option 1 customers - from 1.5p per hour to 4.5p.

Among the hardest hit will be those who have to rent a BT line for their broadband connection even if they don't pay the company for phone bills. However, there is now an alternative: mobile broadband has arrived and this could render your need for a home phone line obsolete.

How does it work?
Mobile broadband works when you plug in a data card or 'dongle' into a laptop which allows you to gain access to the internet. The dongles are easy to set up - you simply need to plug them in and install the drivers and you will be connected. This has revolutionised the internet giving you access to the web no matter where you are - whether at home or travelling across the country.

According to Ofgem, mobile phones have already surpassed landlines with 92% of homes now owning a handset compared with the 89% that have a fixed line. For the one in ten who already rely solely on their mobiles to make voice calls, mobile internet offers a genuine broadband access solution - and could eventually represent a larger share of the market.

What options are there?
Currently three UK mobile phone providers offer mobile broadband packages - T-Mobile, 3 and Vodafone.

T-Mobile was the first to enter the market with its web'n'walk package range - however, in terms of speed it is the most basic offering downloads up to 1.8 megabits (Mb) per second. This is perfectly adequate for most regular internet users but may be too slow for those who like to make large downloads.

Its prices begin at £15 a month, though this will tie you into a lengthy 24-month contract. The costs differ depending on the length of the contract you take out and the monthly download allowance you choose - 3 gigabytes (GB) and 10GB caps are available.

3's range of mobile broadband packages has faster speeds at 2.8Mb and again prices vary depending on the length of the contract and the data allowance you take out.

Prices begin as low as £10 a month on the Broadband Lite package but crucially if you opt for this deal you will have to pay £99.99 for the dongle itself (£79.99 with an 18month contract). Consequently, it's worth considering a higher monthly payment in order to get the dongle for free - the Broadband Plus deal includes a free dongle and a 3GB cap on an 18month contract for £15 a month. 

By contrast, with Vodafone's range you have to pay for the USB modem itself - the cost varies from £59.99 to £99.99 dependent on the package you take out. However, speeds range from 3.6Mb to 7.2Mb making these deals more appropriate for medium to heavy internet users.

Is a dongle the best option?
The long-term success of mobile broadband will depend on how it can compete with the fixed-line market and ultimately whether it can offer better value for money.

Already the take-up is high among students who have the flexibility of using the internet on their laptops in student homes without having to pay expensive line rental costs.

However, for heavy users there is still some way to go before mobile broadband can adequately compete.

A typical two-hour film for example, can take anything from 800Mb-1GB to download. Download caps on mobile broadband packages range from 1GB-10GB and the costs for exceeding these limits can be expensive - Vodafone will charge £15 per GB outside its monthly caps. By contrast, most fixed-line packages have download caps ranging from 20-40GB and many are even unlimited (though a fair use policy will apply).

It's also important to make sure the mobile phone provider has a good reception in the area you plan to access the internet most regularly. In some areas, where reception is poor, attempting to access the internet using a dongle is a waste of time. However, as networks expand their coverage, mobile broadband will become an increasingly useful option. Watch out if you use a dongle to access the internet while you are abroad - it may be tempting but overseas usage fees are high so the price of this convenience could be an extortionate bill. There have been stories of some people wracking up bills of thousands of pounds because they were unaware of the costs.

Clearly, we are still in the early days for mobile broadband but already there are competitive packages available and dongles are likely to become an increasingly popular choice - you can use a comparison tool to compare these deals with fixed-line tariffs.

Mobile broadband deals - at a glance