Mobile Consumers Willing to Pay More for Faster Connections

(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.