Smartphone users will pay more for good mobile connection

Smartphone users will pay more money for good mobile connectivity and coverage, yet currently mobile network providers are missing out on this new revenue source, according to new research.

The survey of British and US respondents carried out by TNS Research on behalf of BelAir Networks reveals that while 56% of people find the quality and speed of their mobile internet connection in metro areas to be adequate, that number drops to 43% for smartphone users.

However, if service providers were to charge extra for a consistently great mobile broadband experience, the survey also reveals a willingness to pay an incremental amount for this, with that increment being slightly higher among smartphone users.

As little as $7 to $8 per mobile broadband subscriber would constitute nearly $20 billion in annual revenue but more than 36% of smartphone users in the US and more than 22% in Briton claim that they are willing to pay an additional $10 (£7) or more per month.

“With the high growth of mobile broadband, with traffic doubling every year, and continued pressure on existing mobile and fixed networks in metropolitan areas driven by increased video and application usage, access to wireless broadband has become like oxygen for smartphone users,” said Ronny Haraldsvik, CMO and SVP marketing, BelAir Networks.

“There is a particular challenge in metro areas where the high density of people and buildings makes ensuring a great mobile broadband experience very complex, but subscribers’ willingness to pay more shows that an untapped market opportunity exists for fixed and mobile service providers and affiliated commerce partners.”

The survey highlights some interesting similarities and differences among US and UK smartphone users, and their attitudes towards mobile broadband services and service providers. M-commerce, an industry that is expected to grow to $31.6 billion by 2016 according to analyst Forrester Research may be impacted, according to the research, which states that nearly two thirds (59%) of respondents surveyed say they are unlikely to use their mobile phone for online shopping and services due to unreliable mobile internet connections. This figure rises to 64% among US smartphone users and 78% for GB smartphone users.

Mobile video services revenues are already seeing the impact, with 73% of UK smartphone users and 69% of their US counterparts likely to be put off using mobile video services due to a lack of seamless mobile broadband experience.

This leads to potentially higher customer churn, with 77% of respondents blaming the service provider for any mobile broadband problems they experience, while 24% hold the application responsible and only 16% blame the device. These figures don’t vary considerably when looking specifically at smartphone users or US vs. UK.

Haraldsvik continued: “Subscribers really don’t care whether they are on 3G, 4G or Wi-Fi they just want a good, no-worries, mobile broadband experience. With users being willing to pay extra, the key takeaway here is a ‘build it and they will come’ scenario: not only is reliable mobile broadband infrastructure a necessity, but for some ‘oxygen’ worth paying for.”

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