Mobile internet to grow dramatically despite economic downturn, consumers say

The first major survey of European and US mobile users conducted during the economic slump gives the telecom industry reasons to be optimistic. Consumers intend to dramatically increase use of mobile data services over the next two years with a significant ramp up in the next 12 months.

The Tellabs-commissioned survey shows that up to 71% of consumers anticipate daily use of services such as mobile internet. Yet mobile users continue to raise concerns about cost, speed and quality of service.

The research, conducted in the five larger Western European countries and the US by Nielsen for Tellabs, analysed 10 mobile data services. It reveals that more than half of the approximately 200 million mobile data users in those countries expect to increase use in the next two years.

More significantly, according to the research more than a quarter of the millions of consumers who do not use mobile data services today intend to start using them shortly, said Jesse Goranson, senior vice president of Mobile Media, The Nielsen Company.
By delving deeper into consumer intent, the Tellabs survey comes just in time as the industry debates demand for services and capital requirements at Mobile World Congress.

In the surveyed countries alone, operators can expect more network traffic from around 175 million consumers for services such as mobile Internet, email, photo uploading and Multimedia Messaging (MMS). Mobile data is clearly here to stay, offering operators a multi-million dollar opportunity.

Mobile data services are not a luxury, but a necessity that consumers plan to purchase despite economic conditions, said Pat Dolan, vice president, Europe, Middle East and Africa, Tellabs. By planning urgent and strategic network upgrades, operators can quickly and cost efficiently address users issues and meet increasing demands on networks.

The detailed breakdown of the top five services that non-users intend to start using shows that anticipated demand is not evenly split. US consumers will drive more new mobile Internet use than Europeans: Around half of US non-users of the mobile Internet intend to use it in the next two years, compared with a third of non-users in Europe.

In the European countries close to 40% of non-users also expect to start using MMS. Italy tends to be the leading adopter across all services, while Germany shows comparatively low adoption rates.

Consumers also highlighted the greatest issues operators need to address: cost (too expensive or unclear), speed, quality and reliability; Pressure on networks will be compounded as 41% of European and 71% U.S. respondents anticipate daily use of mobile Internet services. Mobile e-mail is on a similar growth trajectory, as it is increasingly available through a range of mobile devices; The sustained increase in high-bandwidth applications and corresponding data traffic will create significant challenges for mobile operators looking to maintain profitability. Since most of the growth is expected within the next 12 months, this issue demands immediate attention.

In Tellabs experience, timely, strategic changes to mobile operators networks will enable them to reduce costs, increase speed of services and improve quality and reliability, said Dolan.

Operators that address these challenges early will take advantage of the increasing demand, while enhancing margins.

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