Mobile data usage grows despite price worries

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By: Wise Marketer Staff |

Posted on November 8, 2005

Users of mobile phones are increasingly making use of and experimenting with mobile data services, with 56% now accessing the internet through their mobile device at least once a month, and 33% downloading music, according to research from A.T. Kearney and the Judge Business School at Cambridge University, UK.

The latest Mobinet study of how 4,000 mobile phone users in 21 countries use their phones found that mobile phone users are increasingly comfortable with mobile data services but continue to worry about content and price.

The research found that more than half of mobile phone handsets are less than one year old and have robust multimedia capabilities that are increasingly understood by their users. More than half (56%) of these multimedia mobile phone users said they use their phones to access the internet or check e-mail at least once a month - a significant jump from the 36% who said they did so in the 2004 Mobinet study.

Ease of use
Nearly two-thirds of users said new services and functions were easy to understand and enjoyable to use. Even among older mobile phone users, less than half complained that new functions were difficult to use.

Mark Page, A.T. Kearney's vice president (and leader of the Mobinet study), said: "The growing penetration of new multimedia phones is a catalyst for mobile data adoption. There is a clear relationship between the average revenue per user (ARPU) and the age of the phone the customer uses. People who have recently replaced their handsets are more likely to be heavier users of data services."

Messaging market
Mobile phone users continue to send more pictures, photos and video clips through the use of multimedia messaging services (MMS). One third (33%) of multimedia phone owners now use MMS at least monthly, and MMS is used regularly by nearly half of all 19-24 year-olds. The study concluded that MMS still has significant room to grow when compared with traditional text messaging (SMS) which is already used regularly by nearly 90% of mobile phone users.

Entertainment market
Mobile entertainment services also continue to grow, the study found. One-third of users (33%) with multimedia devices download music monthly, up from 21% in 2004. Mobile gaming increased in Japan, the Americas and Scandinavia, but levels of repeat usage so far remain below those of mobile music.

Globally, 16% of users with multimedia phones reported downloading mobile games at least once a month. More than one in six (17%) of users (rising to 27% under the age of 24) said they were willing to pay for mobile television services. However, two-thirds (66%) of users expressed a desire for time-sensitive television content such as news and sports rather than entertainment shows.

Price challenges
But the study indicates that mobile operators still face challenges in bringing the price and quality of data services into line with consumers' expectations. One-third (33%) of mobile phone users said they are concerned about the cost of mobile data, and around 50% say they are not willing to pay more than US$5 per month for the service. Slightly more than one-third (35%) cited poor content as the reason they don't access multimedia services (a considerable increase from 8% in 2004).

Simon Bell, a professor at the Judge Business School, said: "This is unsettling for operators that have been investing heavily in proprietary portals and content. Perhaps it suggests they seek more partnerships with established online portal brands and media companies."

Operator recommendations
The study recommends that operators shift their marketing focus to encourage repeat use and service loyalty, by leveraging lower pricing and improved content and customer interfaces. To win over new customers, A.T. Kearney encourages operators to perform more extensive market testing, implement easier-to-use and more content-rich services, and to offer low price alternative packages. It is worth remembering that 70% of mobile phone users still say that price remains the primary factor in choosing an operator.

The Mobinet 2005 report has been made available for download from A.T. Kearney's web site - click here.

For additional information:
·  Visit A.T. Kearney at
·  Visit Judge Business School at