Telcos victim of their own hubris over mobile broadband

A new survey conducted by consultancy company PwC has found that mobile broadband operators risk losing revenue (and thereby failing to optimise network investments) because their data charges are unclear and because alternatives such as wi-fi are becoming easier and cheaper to access. After confounding us with incredibly complex and impossible-to-compare voice tariffs, telcos have adopted a similar approach with data – a situation that is getting worse as more of them are ending their “all you can eat” data bundles.

 

According to PwC, nearly 50 per cent of consumers polled don’t know how much data they’re actually using on a monthly basis, with 84 per cent not knowing the real cost of going outside their data allowance. 627 respondents were surveyed as part of the research, all of whom are owners of a mobile device connected via mobile network and all are responsible for paying the bill.

 

PwC never asked me to participate in its survey, but I’m one of the above 50/84 per cent. In fact, I’m surprised the figures are so low. I would wager that 99 per cent of consumers don’t know exactly how much data they are using per month, as the vast majority of operators go out of their way NOT to make it easy for you to find out. Sure, some offer apps, but you have to open them and seek out the section on data usage, then try and decipher what it means – it’s not as though you get an up-to-the-minute counter every time you wake your phone from sleep mode.

 

Well done, then, to those operators who want you to exceed your monthly limit and start to incur massively expensive financial penalties.

Well done – you’ve succeeded in frightening off your customers, who would rather avoid using your state of the art mobile data network in favour of locating a crappy wi-fi hotspot with single-digit download speeds.

 

The PwC survey finds that 45 per cent of consumers polled restrict their usage to try to stay within their allowance, mainly by seeking out wi-fi, as David Russell, telecoms partner at PwC, explains:

 

“With the growing availability and usage of wi-fi in homes, workplaces and public spaces, the challenges for mobile broadband networks have extended beyond the ‘data deluge’ triggered by exploding take-up of smartphones to the management of this shift in connectivity. Where mobile operators can control this shift, they can manage network demand and optimise network investments but they must avoid consumers migrating valuable usage onto wi-fi services provided by fixed-line and other specialist players.”

 

Despite consumers finding public wi-fi services difficult to access and use, 72 per cent of survey respondents say they are satisfied with it. That’s not too far behind the 94 per cent of respondents who say private wi-fi either meets or exceeds their expectations, against only 83 per cent who say the same about mobile broadband.

 

The fear of exceeding their data bundle allowances is causing consumers to self-manage their mobile data consumption, principally by limiting their usage via mobile broadband and offloading their traffic when possible to wi-fi networks.

 

The survey says that consumers are also getting used to setting up wi-fi access on their devices and managing their data usage across various different connections. Mobile broadband access tends to be limited to those services requiring frequent and immediate access whilst on the move – such as email, web access and apps – with data-heavy services such as content downloading delayed until they have wi-fi access.

 

David Russell adds that users are weighing up and trading off considerations of price and immediacy to identify the optimum utility and value from each combination of device, access method and service:

 

“For mobile carriers, this change offers both challenges and opportunities. On the one hand, they risk losing traffic or market share to fixed and specialist providers offering wi-fi services. On the other, those operators that can understand and anticipate how consumers will respond to new connectivity, data access and charging models stand to gain a clear competitive edge and make optimum use of expensive network resources.”

 

Here’s an easy solution for mobile operators from TelecomTV – stop over-charging for mobile data. You prefer to penalise the average consumer by threatening financial penalties if they exceed some impossible-to-comprehend usage limit, rather than targeting the tiny percentage of extremely heavy data users out there. At the moment, the vast majority of us are paying more for capacity we don’t use than we do use – being so frightened of using mobile data that we end each month using way less than half of our allocation. Basically, we’re writing you blank cheques.

 

Listen to what PwC has to say and treat your customers with some respect. Cut the hubris, because it never ends well. One last comment from Russell:

 

“On the threshold of 4G, the world of consumer wireless broadband is changing fast. The question is – will operators be able to change quickly enough to keep up with and keep hold of their customers?”

 

Er no.