Mobile Consumers Willing to Pay More for Faster ConnectionsBy Reuters | Print
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Frustrated with slow mobile Internet connections? You are not alone. A new survey shows that consumers are willing to pay a premium for faster speeds.
(Reuters) - Frustrated with slow mobile Internet speeds and stalling videos, consumers are willing to dole out extra cash for better telecommunicaitons services, allowing more pricing room for operators, a global report showed on Monday.
"2011 will see operators asserting more control over mobile data with the implementation of policy management and measurement tools as well as increased data caps, service restrictions, throttling and overage charging," said Steven van Zanen, Senior Vice President of Marketing for mobile broadband at Acision.
The mobile data company published its global broadband report at the start of the Mobile World Congress in Barcelona. The research was conducted between June and November 2010 on mobile broadband usage in Britain, North America, Brazil, Australia and Singapore.
The report found that 63 percent of consumers are willing to pay an additional fee for added services such as notifications, customization or spending control. It also found that 62 percent of customers have had issues with slow speeds and more than a third struggle with unstable connections or not being able to connect at all.
Another gripe is waiting time for videos to play as well as stalled videos.
Combine those problems and that leaves a considerable churn potential of 31 percent with low variance between countries, the report found.
Managing data capacity amid an explosion of mobile data due to smartphones and other mobile devices is an ongoing issue and operators have just begun to retreat from the flat-rate tariffs they offered to attract consumers in the first place in an effort to ease network strain.
It has been mostly heavy data users taking advantage of unlimited usage, but a host of other devices including tablet PC's, TVs, printers and household appliances may push the number of connected objects to 50 billion by 2020.
While other studies have in the past found that consumers are wary of tiered pricing plans, Van Zanen said they often opt for unlimited data plans because of a lack of information about data usage and lack of control over mobile data usage.
"They want unlimited packages because they want to make sure they get the most out of it and not be confronted with bill shock," he said, adding that "70-80 percent of consumers have no idea that a small percentage of users can capitalize most of the data usage."
The way out is for operators to address individual requirements and offer paid-for premium services that can be delivered as a bundle or through real-time transactions in a way that consumers can understand and relate to, van Zanen said.
"While consumers have the right to access information, the growing hunger for rich data is not sustainable at the current bandwidth," he said, adding that it was up to the operators to manage that traffic. "They need to be the traffic police of the networks, just as we have traffic lights to regulate traffic."
U.S. low-cost wireless carrier MetroPCS Communications (NYSE:PCS), for example, offers data plans that allow unlimited talk, text, Web browsing and access to Google-owned (NASDAQ:GOOG) YouTube. But other features, such as mobile instant messaging, music downloads and additional data access, are only available at higher-priced tiers.
Public interest groups have criticized the data plans, arguing they violate net neutrality rules because some content is blocked under those plans.
According to the Acision report, "consumers, once they understand the need for resource management, have a high acceptance of policies that enable a fair allocation of the available capacity."
The research showed that 67 percent of users support such a policy.