The mobile maze: Navigating consumer usage of mobile data

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The Mobile Maze: Navigating consumer usage of mobile data, Ernst & Young, 30 10 2012

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The mobile maze: Navigating consumer usage of mobile data

  1. 1. The mobile mazeNavigating consumer usageof mobile data
  2. 2. Introduction Ernst & Young has conducted a major is becoming increasingly complex for global online customer research study operators and their customers. covering 6,000 consumers in 12 countries The result is a fast-changing market and worldwide. The research, carried out in May technological environment that we have and June 2012, was designed to highlight termed “the mobile maze.” The challenge short-and medium-term issues facing for operators is to navigate their way mobile operators involved in the mobile through it by meeting the evolving needs, services/applications value chain. demands and expectations of consumers. As part of our primary research, we asked In this research report, we have consumers to detail their usage of specific supplemented the findings from our mobile value-added services, exploring consumer survey with insights from take-up drivers and inhibitors, along Ernst & Young’s sector practitioners. with their attitudes toward their mobile I would like to thank all our contributors service providers in key aspects such as for their time and cooperation in the communications quality and payment preparation of the report. preferences. In both developed and emerging markets across the world, consumers’ rapid adoption of internet-enabled smartphones and tablets has been one of the most significant social, business and technology trends of recent years. As this growth continues, and as device experiences evolve and use cases expand, the market Jonathan Dharmapalan for mobile services and applications Global Telecommunications Leader2 The mobile maze
  3. 3. Ernst & Young insightsand solutionsErnst & Young’s consumer-based insights — as showcased in this report —are supplemented by subject matter expertise across the full spectrum ofmarket dynamics and scenarios within the telecommunications sector.We offer a comprehensive range of solutions relating to areas includingcustomer experience management, customer segmentation, pricinganalysis, customer service systems and BSS/OSS systems design. Allof these solutions apply to operators that are widening their range ofservices and targeting sustainable growth in mobile data revenues.The issues we have highlighted in this report are not unique to telecomoperators — and the diagnostic techniques and solutions highlighted aboveapply across industries. The mobile maze 3
  4. 4. Contents Executive Survey summary sample and methodology 5 6 1 Headline 2 Isolating the 3 Identifying survey inhibitors to the key results take-up drivers of usage 8 14 20 4 Segmenting 5 Navigating the customer mobile maze Cu sto m Usa er s ge- se ct bas r ed vi du ch ce d ar ro re ge an tp no dc en Stro g s om gm ti ng ers er no me Se um pr 3G ns s) iva rcia co der id l inn n Sim pa cy st ng Pre Mo e se we u old sp ple re ovat (Lo in yo cu eh pr r ta rit is ions aly s y us an hou ep riffs pro s Foc aid ter tecti opt Bet ions tionon Lac cap Poor attributes brings uca k o ac ty etw fn i co ed o s rk mm riff er Serv om r ta un st cu ice tio ica Mig ple n r se te cho et sim rat rvi ce gb ngin ice ion of Clear cha s m io n fro at ce 2G lan an ,3 Ga xp lev nd re tte re 4G Be an d Sm ar ss tp ne ho re ne wa s ea driv eas e us age Incr opportunities 26 32 How Ernst & Young can help 344 The mobile maze
  5. 5. Executive summarySmart devices aredriving take-up ofmobile data services,but regular usage is in Customerits infancy understanding of mobile• More than 1 in 3 mobile data tariffs is low, customers worldwide are and this is hindering users of web browsing, Operators have a awareness — of and instant messaging and more emphatic and trust in — new service mobile social media. proactive role to play in propositions• Smartphone owners use supporting end users’ • Only 56% of end users Better segmentation of twice as many mobile service choices feel they have an customer attributes can services as feature phone • Potential users need effective understanding unlock new demand owners. more guidance from of mobile data tariffs … • Prepaid users are a• Fewer than 1 in 5 mobile service providers: 40% of • … and 3 in 10 think users would try services high-value segment, customers are regular operators don’t do such as mobile payment while operators should users of video, VoIP and enough to communicate sooner if additional heed the specific needs app store services. new service offerings. advice were provided. of older users. • Customer concerns over • Improved privacy and • Behavioral and perceived risks around security features would attitudinal insights can overspending, privacy make 1 in 3 customers be significant factors and security are limiting try new services sooner. in driving consumers’ take-up. take-up and usage of new • 1 in 5 users want more services. flexibility in payment options — and consumers’ payment preferences for data vary in all markets. The mobile maze 5
  6. 6. Survey sample and mThe research study detailed in this report was conducted using an onlinequestionnaire, and responses were provided by 6,000 consumers in 12 countriesacross five continents. The countries covered — together with key statistics abouttheir respective mobile data markets — are shown in Figure 1.Figure 1. The 12 countries from 5 continents covered in our survey1 Sweden Czech Republic Netherlands Population: 9.4 m Population: 10.5 m Population: 16.7 m Mobile penetration: 160.8% Mobile penetration: 136.6% Mobile penetration: 120.7% 3G penetration: 92.2% 3G penetration: 43.5% 3G penetration: 45.8% Smartphone penetration: 51.0% Smartphone penetration: 16.0% Smartphone penetration: 43.0% 4G status: Commercial LTE 4G status: Commercial LTE 4G status: Commercial LTE services launched in 2009 services launched in 2012 services launched in 2012 UK Population: 62.7 m Mobile penetration: 139.1% 3G penetration: 64.0% Smartphone penetration: 51.0% 4G status: Commercial LTE services launched in 2012 US Population: 311.7 m Mobile penetration: 110.8% 3G penetration: 64.0% Smartphone penetration: 55.0% 4G status: Commercial LTE services launched in 2010 Italy Population: 60.8 m Mobile penetration: 150.5% 3G penetration: 58.7% Smartphone penetration: 28% 4G status: On-going/Planned deployment Brazil Greece India Population: 196.7 m Population: 11.3 m Population: 1,241.3 m Mobile penetration: 124.6% Mobile penetration: 140.8% Mobile penetration: 80.3% 3G penetration: 21.7% 3G penetration: 32.0% 3G penetration: 1.3% Smartphone penetration: 14.0% Smartphone penetration: 35.0% Smartphone penetration: 3.0% 4G status: Commercial LTE 4G status: On-going/Planned 4G status: Commercial LTE services launched in 2011 deployment services launched in 20121 Sources: 2011 World Population Data Sheet, Population Reference Bureau, 2011; The Mobile World; Business Monitor International;Our Mobile Planet Smartphone Research, 2012; Global mobile Suppliers Association (GSA), September 2012 6 The mobile maze
  7. 7. methodology Ernst & Young engaged an international market research agency to select the survey sample for Ernst & Young and host the survey on our behalf, providing the country samples via its online panels. The online methodology used for the survey means the sample within each country is naturally skewed toward the consumer population who use online services. In terms of demographics, our sample is broadly in line with Russia Population: 142.8 m the general population for developed countries with high PC Mobile penetration: 166.2% penetration, such as the US, UK and Sweden. However, the 3G penetration: 18.2% bias toward online users means the sample in less developed Smartphone penetration: 18.0% 4G status: Commercial LTE countries such as Brazil and India is not representative of each services launched in 2012 country’s population as a whole. This means the findings show significantly higher levels of income and smartphone ownership than would be the case across the entire population, therefore China focussing on operators’ preferred groups. Population: 1,345.9 m Mobile penetration: 77.9% A further impact of the online methodology, and the use of 3G penetration: 9.5% online panels, is that older age groups are underrepresented Smartphone penetration: 33.0% in our sample. The split by age in each country is shown in 4G status: On-going/Planned deployment Figure 2. The overall male-female ratio in our sample is 50:50 and is roughly similar across all countries. The data in this report is presented on an unweighted basis, with each country contributing equally to the grand total. Australia Population: 22.7 m Mobile penetration: 142.9% 3G penetration: 88.3% Smartphone penetration: 52.0% 4G status: Commercial LTE services launched in 2011 Figure 2: Age of survey respondents, by territory 100% 10% 12% 10% 14% 17% 20% 18% 19% 19% 18% 17% 17% 24% 80% 16% 15% 18% 20% 21% 23% 21% 24% 20% 19% 21% 22% 22% 21% 23% 60% 24% 22% 20% 20% 18% 21% 23% 24% 22% 22% 14% 40% 26% 26% 21% 23% 21% 23% 18% 19% 20% 22% 22% 20% 19% 20% 26% 24% 29% 20% 18% 16% 18% 21% 21% 20% 21% 21% 15% 0% Australia Brazil China Czech Greece India Italy Netherlands Russia Sweden UK US Grand total Republic 18–24 25–30 31–35 36–45 46–65 The mobile maze 7
  8. 8. 1. Headline survey resultsOverall, our consumer study shows that smartphones dounlock new services, but that regular usage remains low.Within this overall scenario, our study smartphones six Our consumer study shows that has producedkey results. do unlock new services, but that regular usage remains low.8 The mobile maze
  9. 9. Key messagesSmart devices drive service take-up — but there is asignificant portion of non-users• Consumers are taking up mobile internet services — web browsing and social media are the most established.• Service usage levels are substantially higher for smartphone users and those with access to 3G networks — but there is little difference in service usage between prepaid and postpaid users.• Younger age groups and those in urban areas use more services — low spenders are also keen on mobile internet services, meaning there is a weaker correlation between income group and service take-up.• One-third of respondents have no intention of using mobile internet services — levels of service relevance and awareness are low in this group.• A high proportion of mobile users say they are considering taking up mobile services, suggesting a high level of latent demand.• Poor signal strength significantly inhibits service take-up — and improved network access capabilities can convert those considering services into users. The mobile maze 9
  10. 10. Consumers are using a range of value-added mobile servicesAs Figure 3 shows, web browsing, social media and messaging instant messaging is also relatively popular, being used regularlylead the way in term of consumer service usage — with mobile by 25% of respondents — although 1 in 3 do not use it or intendweb browsing (59%) and social media (49%) being used regularly to. App stores and mobile video services are also well-establishedby half of the respondents across our global sample. Mobile with users as more occasional use cases.Figure 3. Q. Please tick one box that best describes your usage of thefollowing services on your primary mobile device100% 90% 15% 18% 32% 29% 31% 31% 28% 80% 8% 36% 41% 7% 43% 4% 70% 3% 5% 12% 4% 15% 60% 16% 18% 18% 18% 16% 19% 7% 50% 7% 9% 7% 22% 8% 7% 24% 40% 7% 9% 8% 9% 8% 13% 8% 7% 30% 59% 24% 6% 49% 19% 18% 24% 7% 6% 20% 19% 15% 12% 10% 25% 15% 17% 13% 18% 9% 8% 8% 0% Mobile web Social Media Instant Mobile VoIP Music services Operator app 3rd-party app Mobile video Mobile money — Mobile payment browsing messaging stores stores transfer at location Use service regularly (every day/several times per week) Use service occasionally (approximately once a week or less) Have used the service regularly in the past but no longer use it Have tried the service in the past but did not become a user Do not use this service but considering trying/using it in the future Do not use this service and have no intention of using it in the futureHowever, while willingness to try new services is relatively high, that they don’t currently use. However, between one-third anda sizable minority of consumers remain resistant. A significant one-half of respondents do not use or intend to use 8 of the 10proportion of the respondents in our study — up to 24% for services highlighted in Figure 3.mobile money payments — are considering trying mobile services Payment type has a minimal impact on take-up — device and network capabilities determine service usageSmartphone owners have the highest usage profiles, using an However, network capability is a less important usageaverage of 5 value-added services “occasionally” or “regularly” — consideration than the device’s form factor, with 2G smartphonetwice as many as non-smartphone owners, who use 2.5 services owners being heavier users of value-added services than 3Gon average (see Figure 4). Alongside ownership of a handset non-smartphone users. One factor that appears to have littlewith smart technology, network capability is a further important impact on service usage is the payment plan. Across all handsets,factor in service usage. Our findings show that 3G terminals in postpaid customers uses an average of just 0.5 more servicesthe same device class typically produce take-up of one extra than prepaid customers. And smartphone owners have the sameservice, while 3G customers use an average of 4.6 services usage profile, regardless of payment plan.compared with 2.6 services for 3G users.10 The mobile maze
  11. 11. Figure 4. Average number of services used occasionally or regularly,prepaid and postpaid 6 5.1 5.2 5.0 5.0 5 4.1 3.9 4.2 3.7 4 3 2.7 2.9 2.4 2.5 2.2 2.3 2 1 0 2G non- 3G & 2G non- Non-smartphone 2G smartphone 3G & 2G smartphone Smartphone total Total smartphone smartphone total Prepaid Postpaid Non-smartphone users are more averse to mobile data services, but untapped demand existsWhen we asked smartphone and non-smartphone owners about Among non-smartphone owners, over half browse the web andtheir usage of various services, more than half of smartphone use social media, but more than 4 out of 10 don’t intend to useowners said they use mobile web browsing, social media, other services. The greatest contrast in service usage betweenthird-party app stores and mobile video (see Figure 5). However, smartphone and non-smartphone owners is for third-party appthe reluctance to use mobile payments was more marked than stores. Most positively, the high proportion of non-smartphonewith other services. owners considering trying new services suggests strong latent demand that has yet to be tapped.Figure 5. Q. Please tick one box that best describes your usage of thefollowing services on your primary mobile deviceSmartphone owners100% 7% 4% 10% 16% 4% 4% 22% 22% 22% 25% 18% 80% 3% 5% 33% 36% 13% 11% 10% 5% 11% 16% 17% 16% 15% 7% 8% 60% 7% 10% 9% 9% 10% 9% 9% 21% 9% 24% 10% 10% 40% 17% 31% 7% 69% 36% 9% 6% 24% 22% 8% 59% 27% 20% 34% 20% 15% 19% 23% 20% 24% 13% 11% 11% 0% Mobile web Social media Instant Mobile VoIP Music services Operator app 3rd-party app Mobile video Mobile money — Mobile payment browsing messaging stores stores transfer at locationNon-smartphone owners100% 25% 29% 80% 44% 40% 43% 42% 50% 51% 53% 54% 13% 11% 60% 5% 3% 5% 10% 3% 22% 21% 21% 15% 22% 40% 25% 6% 8% 7% 27% 6% 23% 23% 6% 7% 6% 5% 20% 44% 8% 6% 15% 7% 5% 36% 9% 13% 13% 6% 5% 4% 4% 13% 10% 7% 7% 11% 10% 9% 10% 4% 4% 4% 5% 0% Mobile web Social media Instant Mobile VoIP Music services Operator app 3rd-party app Mobile video Mobile money — Mobile payment browsing messaging stores stores transfer at location Use service regularly (everyday/several times per week) Use service occasionally (approximately once a week or less) Have used the service regularly in the past but no longer use it Have tried the service in the past but did not become a user Do not use this service but considering trying/using it in the future Do not use this service and have no intention of using it in the future The mobile maze 11
  12. 12. Service usage varies according to income, age, location and genderPerhaps unsurprisingly, our findings show that monthly spend second income quartile, 53% of the third quartile and 49% of theon mobile services closely correlates to personal disposable fourth quartile. However, there is less correlation between mobileincome, with higher-income consumers tending to use more monthly spend and service usage: those in the top quartile spendservices. As Figure 6 shows, consumers in the top 25% income three times as much on mobile as those in the bottom quartile,bracket use almost one extra service compared with those in the but use only 22% more services.lower half of the income scale. Also, 72% of consumers in thetop income quartile own a smartphone, compared to 61% of theFigure 6. Service usage and spend* by income quartile** Figure 7. Service usage and smartphone ownership by age group Number of services taken US$ monthly spend Number of services taken % Smartphone ownership 5 4.5 80 5 80 4.5 4.6 4 4 70 4.2 70 3.7 3.7 4 4 69.6 4 60 67 3.5 60 63 62 3 50 3 2.8 58 50 54 49.1 47.6 40 40 2 30 2 30 33.8 37 20 20 1 22.81 1 10 10 0 0 0 0 1st quartile 2nd quartile 3rd quartile 4th quartile Overall 18–24 25–30 31–35 36–45 46–65 Overall Number of services taken Monthly spend (including downloads) Number of services taken % smartphone ownership*Mobile spend was captured in local currency in our survey and converted into US dollars usingthe spot rates at 11 June 2012.**Income data was split into quartiles within the data for each country, to enable a consistentincome metric that could be used in our analysis.Beyond the impact of income, there is more variation in usage In terms of the type of area where people live, urban dwellers useaccording to age and location. Service usage is highest among 4.7 services on average, compared with an average of 3.1 for25- to 30-year-olds, who use an average of 4.6 value-added consumers living in rural areas. Men use 4.1 services on average,services (see Figure 7). This age group also has the highest compared with 3.8 for women.penetration of smartphones. Also, while 18- to 24-year-oldsuse a relatively high number of services, they have the lowestaverage total mobile spend in our study at US$37 per month,compared with an overall average of US$48 per month. Many consumers feel mobile internet services are lacking in relevanceOur study confirms that many mobile internet services lack Perhaps surprisingly, low awareness of services is mostrelevance to end users — and this perceived irrelevance is the pronounced among younger users. Those aged 18 to 24 werenumber one reason why mobile users decide not to take up more likely to state that they had not heard of services than olderservices. Also, as Figure 8 shows, while social media and mobile age groups, except for social media. Lack of awareness of instantvideo have a high level of awareness, a high proportion of messaging is high among non-users, particularly in the Czechnon-users of these services say that they are not relevant to Republic (62%), Sweden (60%) and Russia (48%). Low awarenessthem personally. stems from customers being unaware of the benefits certain services can offer, while awareness of social media and instant messaging tends to be driven by peer usage of these services.12 The mobile maze
  13. 13. Figure 8. Service awareness and affinity for respondents with nointention of using mobile services80 6360 53 49 49 43 43 46 46 40 35 34 3940 31 30 27 20 22 2120 14 6 0 Mobile web Social media Instant Mobile VoIP Music services Operator app 3rd-party app Mobile video Mobile money — Mobile payment browsing messaging stores stores transfer at location % not heard of the service % service is not relevant … while poor network quality acts as a brake on take-up and continued usageWhen we asked consumers about their reasons for using or interviewed — between 7% and 18% across different services —not using mobile internet services, it became clear that poor have either stopped using mobile internet or have tried thesignal strength undermines the customer experience and slows service and not become a user.adoption and usage. A high proportion of the customers weFigure 9. Network quality as a reason for using/not using mobile web Reasons for not taking up mobile internet Reasons for stopping using mobile internet Reasongs for taking up mobile internet service after a trial services services sooner, if considering them Service was not relevant Service was not relevant 38% 35% Free trial of the service 59% to me to me Service was too expensive 34% Service was too expensive 30% WiFi access 40% Service was not always Service was not always Improvements in mobile available to me due to poor 29% available to me due to poor 28% 39% signal strength mobile signal strength mobile signal strength 0% 10% 20% 30% 40% 0% 10% 20% 30% 40% 0% 20% 40% 60%Lapsed users and trialists who have stopped using mobile For customers with no intention of taking up services, signalinternet services account for 7% of our overall sample. As strength is less of a concern — only 6% cite this as a reasonFigure 9 shows, these respondents cite poor signal strength as for not using services, compared to 20% who point to handsetthe number three reason for discontinuing usage. This is a key compatibility issues.factor across all services. More positively, just as poor network quality is an inhibitor,Also, among consumers who have stopped using mobile web improved network quality can stimulate uptake. For customersservices, 41% of urban dwellers point to poor signal strength considering using mobile internet services, Wi-Fi access andas a contributing factor. This finding suggests that network improved network signal strength are two of the top reasons tocongestion is more of a problem than overall network coverage. try them sooner. The mobile maze 13
  14. 14. 2. Isolating the inhibitors to take-upOverall, our consumer study shows that smartphones dounlock new services, but that regular usage remains low.Within this overall scenario,into the factors inhibitingsix Looking more closely our study has produced consumer adoption, our research and industrykey results. insights suggest that the main issues are low customer understanding of mobile service offerings, and the fact that end-users are struggling to discover these services’ true value.14 The mobile maze
  15. 15. Key messagesLack of understanding is undermining trust and fuelingconfusion around pricing• 1 in 3 mobile users do not feel they understand mobile data tariffs effectively, while only 1 in 5 feel they can very effectively make value judgments about new service offerings.• Overall data plan pricing affects how inclined users are to adopt individual services — there is a high level of correlation between tariff understanding and the ability to evaluate specific services.• Confusion in the market is widespread: in addition to those who lack effective understanding, a significant minority “do not know” whether they understand mobile data tariffs or whether they are well informed by operators about new services.• Fears of overspending and an inability to understand pricing are stopping trialists from continuing to use mobile internet services and are also leading existing users to stop using services.• Privacy and security concerns are a significant inhibitor to take-up, highlighting a lack of effective communication from service providers about data privacy. The mobile maze 15
  16. 16. Customers struggle to understand mobile data tariffs ...One of the clearest findings from our research is that consumers tiered pricing for mobile data. Looking across the world, olderare deeply confused about data tariffs: 1 in 3 respondents say customers struggle the most, with only 46% of 46- to 65-year-they cannot understand mobile data tariffs effectively, and when olds claiming that they can understand tariffs effectively,those who “don’t know” are included, the proportion who are compared with 69% of 18- to 24-year-olds.confused rises to almost 1 in 2. Even more worryingly, only 1 The widespread lack of understanding of mobile tariffs has ain 5 customers claim that they can make an accurate judgment dramatic impact on uptake of mobile services. And the levelas to what the best tariff option is. In the Czech Republic, this of confusion is equally high in both the prepaid and postpaidproportion is as low as 1 in 10. segments, with no difference in the understanding of data tariffs As Figure 10 shows, the proportions saying they “don’t know” between the two. This is surprising given the closer relationshipare especially high in the US (32%) and the Netherlands (21%). operators are assumed to have with their contract customers andThis suggests that consumers’ confusion over tariffs is especially the clear ability to communicate more effectively with them viastrong in highly developed markets with 4G offerings and regular billing and upgrade cycles.Figure 10. Q. How well do you understand the mobile data tariffsoffered by your mobile operator?100% 3% 4% 10% 9% 10% 5% 7% 15% 17% 13% 12% 13% 21% 9% 24% 32% 80% 17% 31% 28% 19% 25% 24% 20% 15% 21% 60% 42% 41% 16% 36% 33% 27% 42% 36% 33% 33% 42% 43% 39% 20% 40% 19% 22% 37% 30% 26% 20% 20% 18% 22% 24% 21% 17% 17% 17% 14% 15% 10% 11% 11% 14% 10% 5% 5% 5% 6% 8% 8% 0% Australia Brazil China Czech Republic Greece India Italy Netherlands Russia Sweden UK US Grand total Not at all effectively — details are confusing and can’t make a judgment of what value they offer or which the best option is Not very effectively — don’t understand some of what is being offered and is difficult to make a judgment of what value they offer and which the best option is Quite effectively — understand most of what is on offer and can make a reasonable judgment of what value they offer and which the best option is Very effectively — understand perfectly what is on offer and can make an accurate judgment of what value they offer and which the best option is Don’t know ... while a significant portion feel poorly informed about new services and therefore unable to assess their true valueConsumers’ deep sense of confusion extends to services, with Asked to explain why they don’t understand new services, nearlyless than 1 in 5 of our respondents saying they believe they one-third of all the consumers in our study say they cannot makecan very effectively discover the value of new service offerings. a judgment either because the details are confusing or they don’tOnly 18% feel they can make an accurate value judgment when understand the offers. Also, the high proportion of respondentsassessing new services, although the level of understanding is who “don’t know” — at 17% — suggests added confusion whenhigher in the youth segments. it comes to understanding service benefits. The proportion who “don’t know” rises to 26% among 46- to 65-year-olds. As Figure 11 shows, only 18% of all respondents rate their operator as “very effective” at communicating new services.16 The mobile maze
  17. 17. Drilling down into the findings, a high correlation emerges very effectively. Among those who don’t understand mobile databetween consumers understanding data tariffs and being able tariffs or “don’t know” whether they understand them, just 5%to assess new services effectively. A significant majority  58% claim they effectively understand new services. These findings of those stating that they very effectively understand mobile underline the role that operators can play in boosting service data tariffs also say their operators communicate new services take-up by educating and informing consumers.Figure 11. Q. How effectively does your mobile operator communicatenew service offerings?100% 3% 12% 9% 14% 10% 11% 9% 21% 14% 17% 9% 22% 27% 32% 30% 80% 19% 24% 18% 25% 18% 34% 17% 16% 42% 12% 13% 18% 60% 49% 34% 30% 37% 36% 33% 43% 28% 40% 28% 40% 35% 33% 21% 28% 27% 20% 18% 28% 23% 20% 20% 21% 16% 16% 15% 16% 10% 13% 12% 8% 8% 10% 9% 8% 5% 5% 6% 7% 5% 0% Australia Brazil China Czech Republic Greece India Italy Netherlands Russia Sweden UK US Grand total Not at all effectively — details are confusing and can’t make a judgment of what value it offers Not very effectively — don’t understand some of what is being offered and is difficult to make a judgment of what value it offer Quite effectively — understand most of what is on offer and can make a reasonable judgment of what value it offers Very effectively — understand perfectly what is on offer and can make an accurate judgment of what value it offers Don’t know Fear of overspending limits take-up and continued usage of servicesAcross our global consumer sample, pricing issues emerge as overspend and a lack of understanding of pricing options asstrong reasons for stopping or avoiding service usage, with reasons for discontinuing their use of a service (see Figure 12) ora high proportion of trialists and lapsed users citing fears of for not taking it up after trying it out (see Figure 13).Figure 12. % of those who have stopped using a service because ofoverspending concerns and poor understanding of pricing30 2420 19 19 18 18 17 16 14 14 13 11 12 11 10 1010 9 9 7 6 2 0 Mobile web Social media Instant messaging Mobile VoIP Music services Operator app 3rd-party app Mobile video Mobile money — Mobile payment browsing stores stores transfer at location Worried about overspending Don’t understand the pricing options The mobile maze 17
  18. 18. Figure 13. % of trialists who have not taken up a service because ofoverspending concerns and poor understanding of pricing30 23 22 20 2020 18 18 17 16 16 14 13 12 11 12 11 12 11 9 10 910 0 Mobile web Social media Instant messaging Mobile VoIP Music services Operator app 3rd-party app Mobile video Mobile money — Mobile payment browsing stores stores transfer at location Worried about overspending Don’t understand the pricing optionsFear of overspend is greatest with mobile web browsing, and mobile video sites such as YouTube, the risk of overspenddemonstrating how consumers are struggling to align their remains a significant concern — a finding that points to additionalusage with its cost implications, both directly and indirectly. confusion over how free services relate to overall data plans.Prepaid customers are more likely than postpaid to cite poor Consumers are also wary of overspending on app stores, voicingunderstanding of pricing options as a reason for non-usage. unease over the indirect costs of downloading content such as high-end mobile games.Consumers’ confusion over pricing leads to a fear of “bill shock”making them wary of services that are ostensibly “free.” In caseswhere customers do use free services, such as social media Privacy and security are an area where consumers’ levels of trust are lowUptake of some mobile internet services is being inhibited by card information as reasons for rejecting these services (seeconsumers’ concerns over personal privacy and data security: Figure 14). Given these findings, operators need to carefully1 in 4 non-users of mobile social media and mobile money consider the balance between the security and convenience ofservices cite unwillingness to give personal details or credit mobile internet services.18 The mobile maze
  19. 19. Figure 14. % of non-users who do not want to give personal details orcredit card information50%45%40%35% 31%30% 25% 23%25%20% 16%15% 13% 13% 12% 12% 13% 11%10% 5% 0% Mobile web Social media Instant messaging Mobile VoIP Music services Operator app 3rd-party app Mobile video Mobile money — Mobile payment browsing stores stores transfer at locationFigure 15. % potential users stating that more information on privacyand security measures would make them try services sooner50% 45%45% 41%40%35%30% 29% 26% 25% 25% 25%25% 21% 21% 20%20%15%10% 5% 0% Mobile web Social media Instant messaging Mobile VoIP Music services Operator app 3rd-party app Mobile video Mobile money — Mobile payment browsing stores stores transfer at locationSimilarly, better communication on privacy and security is an available. In general, communications and connectivity-orientedimportant decision driver for consumers who are considering services are those where potential users would most appreciatenew services. As Figure 15 shows, nearly half of potential mobile further reassurance on privacy and security measures.money users say they would try out these services sooner ifmore information on privacy and security measures were made The mobile maze 19
  20. 20. 3. Identifying the key drivers of usageOverall, our consumer study shows that smartphones dounlock new services, but that regular usage remains low.Within this overall scenario, our study encourage Our findings on the factors that has produced six consumers to adopt and use new mobilekey results. services show that operators need to support and increase end users’ — ability to make informed choices or a lack of understanding will continue to undermine take-up and spending.20 The mobile maze
  21. 21. Key messagesClear and consistent communications will supportgreater end-user affinity with mobile internet services• Greater insights into how and why people should use mobile internet services would make them try new services sooner.• For occasional service users, greater comfort on privacy and security features would stimulate more regular usage, while overall trust levels with service providers also have a role to play.• Operators must carefully calibrate mobile data pricing options — consumers’ desire for flat-rate pricing is entrenched, but potential users would like more payment option choices for individual services.• The distributed preferences for mobile app payment compound the complexity of customer attitudes toward data pricing — the relatively higher preference for ad-funded models in European markets shows that new opportunities exist as the mobile data environment becomes more mature. The mobile maze 21
  22. 22. Potential users need greater guidance on how and why they should use mobile services …Consumers need to be provided with greater insight to help them sooner if they had a better understanding of the benefits. Thisassess the value of mobile services, particularly with “substitute” greater understanding is crucial, since these services representservices that replace other offerings. As Figure 16 shows, more alternatives to existing behaviors such as card paymentsthan 1 in 3 potential users of instant messaging, app stores and SMS.and mobile money services say they would try these servicesFigure 16. % of potential users stating that better understanding ofservice benefits and installation will make them try it sooner50%40% 39 40 40 36 37 36 32 35 31 31 3030% 28 28 26 27 21 25 25 24 2520%10% 0% Mobile web Social media Instant messaging Mobile VoIP Music services Operator app 3rd-party app Mobile video Mobile money — Mobile payment browsing stores stores transfer at location More details of how to use and install service Greater understanding of service benefitsAt the same time, between 15% and 20% of potential users Practical guidance on how to install services on devices is alsoacross all service categories state that clearer advertisements especially important for services that can act as a substitute forand communications about a new service would make them existing behaviors. Females are more likely than males to saytry it sooner. So better-segmented and more informative that being provided with more details of how to use and installcommunications from operators would also help overcome the services would accelerate their trial usage of them.lack of awareness among non-users of services. ... and improved security and privacy features are key to driving more frequent usageFor occasional users, improved security and privacy features A further factor that would spur usage is greater levels of trustare likely to make them use a service more, particularly with in operators themselves. As Figure 18 shows, 1 in 4 of theservices such as social media and mobile money transfers (see occasional users of mobile internet services in our study say thatFigure 17). Privacy and security concerns could well form a greater trust would make them more regular users of serviceslarger issue around communications more generally: operators such as mobile money transfer and operators’ app stores.need to understand the drivers of consumer satisfaction in the Overall, it is clear that trust is an important driver for both take-legacy social media and e-payment environments and respond up and usage of services such as these.accordingly across all their service areas.22 The mobile maze
  23. 23. Figure 17. % of occasional users stating that improved security and Figure 18. % of occasional users stating that greater trust in theprivacy features would make them use the service more regularly service provider would make them use the service more regularly Mobile web browsing 34% Mobile web browsing 21% Social media 42% Social media 24% Instant messaging 31% Instant messaging 23% Mobile VoIP 29% Mobile VoIP 21% Music services 21% Music services 18% Operator app stores 31% Operator app stores 27% 3rd-party app stores 28% 3rd-party app stores 24% Mobile video 24% Mobile video 20% Mobile money — transfer 43% Mobile money — transfer 27%Mobile payment at location 34% Mobile payment at location 30% 0% 10% 20% 30% 40% 50% 0% 10% 20% 30% 40% 50% Potential users seek more choice and flexibility of payment options for specific services ...Mobile web browsing stands out as an area where more flexibility could be a bad thing, since it may confuse consumers even more.and choice of payment options would spur consumer usage However, a wider choice of tariff options is also relatively more(see Figure 19). Looking across different geographies, this important for mobile payment services. Overall, these findingsdemand is more pronounced in Europe than elsewhere in the point to a delicate balancing act for operators between choiceworld, with 51% of Czech, 45% of Italian and 38% of UK potential and simplicity, while also underlining the fact that data pricingusers highlighting this as a requirement. In contrast, just 4% of is a highly complex issue for service providers. Low customerpotential mobile web browsers in the US stress the need for more understanding would seem to indicate a need for simplicity — butflexible payment options. greater choice allows operators to build new value perceptions. Achieving both goals at once is not easy.This disparity appears to reflect both the early appearanceof tiered pricing and the high levels of customers who don’tunderstand data tariffs, perhaps suggesting that more choiceFigure 19. % of those considering trying a service stating that morechoice of tariff options will make then try it sooner40 31 2930 27 27 22 22 23 23 22 23 23 23 20 21 20 21 21 21 21 192010 0 Mobile web Social media Instant messaging Mobile VoIP Music services Operator app 3rd-party app Mobile video Mobile money — Mobile payment browsing stores stores transfer at location More choice of tariff options Increased flexibilty of payment options The mobile maze 23

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