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STUDY: Sky-high costs and undesirable price plans are blamed for lapsed 3G users
Posted by Arne Hess - on Wednesday, 11.10.06 - 20:20:22 CET under 01 - General News - Viewed 7507x
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Despite mobile phone providers' endeavours to recruit 3G customers, third generation technology remains a low priority for mobile users across the globe - and cost is the overriding factor. The annual Global Technology Insight (GTI) study by leading market information company TNS has identified little increase in 3G technology usage amongst consumers, who see the offer of mobile TV and surfing the net as costly and unnecessary services.

At a global level, almost a quarter of people cite cost as the main obstacle to them using 3G (23 per cent); a further 22 per cent say cost puts them off using Wi-Fi technology. A fifth of people (21 per cent) are not downloading songs to their mobile primarily because of the expense, and 23 per cent choose not to surf the internet on their phone because it costs too much to do so.

With technology providers promising better-than-ever quality viewing and faster connections, it may seem surprising that 3G and Wi-Fi capabilities have fallen close to the bottom of the mobile phone feature 'wishlist'. In fact, fewer people today aspire to have these facilities than they did a year ago, according to the TNS study (7 per cent of those surveyed in 2005 listed 3G as a priority feature to have on future mobile phones, compared with just 4 per cent in 2006).
And although more people now have 3G phones than ever before (20 per cent of mobile users worldwide) less than half (9 per cent) are using their 3G capability. Of the 26 per cent of people who have Wi-Fi access through their phones (including Smartphones and PDA phones), just 11 per cent are using it - and mobile TV is no more popular, with only 9 of the 21 per cent of people with mobile TV-capable phones actually using this service.

Despite widespread publicity about cost-effective service packages, mobile providers are still not giving their customers what they want - and people are having to purchase 3G packages that don't suit. The TNS study found that by far the most popular methods of payment for 3G and Wi-Fi enabled services are buffet-style price plans - either 'pay once for unlimited use', 'fixed monthly sum for unlimited use' or having the service bundled as part of the overall contract. However, many customers are being forced into paying per kilobyte used or paying each time a service is used - which is not popular amongst consumers.

Hanis Harun, Global Director, TNS Technology, comments; "Given that cost is such a key obstacle to the adoption of more advanced mobile services, mobile operators must provide pricing regimes which are fixed for unlimited use, transparent and affordable. We also see some acceptance towards paying by time of use for mobile music and mobile TV services, pointing towards streamed services as a possible solution. As other sources for mobile services open up, such as side-loading and pod-casting, backed by the high interest in Bluetooth connectivity that we are seeing, it is getting ever more critical for service or content providers to peg their services competitively."

The TNS study found that other elements such as speed of the network, battery life, screen size, image quality and memory can also be obstacles for many services, but their impact pales in comparison to that of cost.

Hanis adds: "Cost is the quick fix and should provide fast usage uplift especially amongst those services already found interesting by consumers, such as songs downloads and realtime TV."

These results aren't a surprise at all but I wonder how long it will takes for carriers to pick-up the real problem of the low mobile data usage. It's not that there are no devices available, that we don't have the right services; it's everything about the monthly costs.

Cheers ~ Arne


 
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Comments
Posted by Brandon on 12.10.06 - 17:07:53

When you consider that the average cost of 3G equipment (Node B's, RAN and IMS Gateway) is at least double and that the backhaul is possibly even more it should come as no surprise that the carriers HAVE to charge more for this bandwidth.

The other option... we could do like the web and have small paid advertising prior to video's and such.

Posted by Arne Hess on 12.10.06 - 18:53:04

Doubled to what? I don't say, that I expect compareable tarifs the the fixed DSL world, not in the short-run but if you think, that 3G network costs are 1/3 of what they (still) are in 2/2.5 G, I wonder why we still have the same tarif structure as we had it before with 2.5G. Yes, there is potential to reduce access costs for the consumer and as I said - either you develop a mobile data market now, with the networks which are there but not used or you better forget it.

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