Two-thirds of US consumers looking to buy a smartphone aren’t willing to pay more than $50 per month for mobile data plans, while 50% of smartphone users don’t know their mobile data consumption rates. The results of Parks’ “Mobile Data and Applications: Market Update” report “highlight the risks to mobile operators as they try to shift from unlimited to usage-based mobile data plans,” according to the market research firm.
“Operators need to create new value propositions for their data services,” said Harry Wang, director of mobile research for Parks Associates. “U.S. consumers are accustomed to unlimited data use for one fixed price. They are reluctantly embracing the capped data plan tiers, but they have high price sensitivity and will rebel against byte-tracking. Operators need to shift consumers’ perception away from raw data to the experience created by their data services.”
Though the competitive challenges facing mobile telecompetitors are real and substantial, Parks sees 2012 marking a high point for mobile network operators. “2012 will be a watershed year for mobile operators,” Wang stated.
“Now that 4G networks are rolling out across the globe, operators have to do three things right: find new revenue sources for their faster and more efficient networks, fend off over-the-top competitors, and manage their networks efficiently-including modifying data plan pricing to align revenue with network cost. None will be easy, but they have to roll up their sleeves and get them done.”
US smartphone users are eating up mobile apps, Parks found. More than 90% have downloaded mobile apps at a rate of two per month since buying their devices.
Looking at mobile spending worldwide, Parks forecasts that consumers will spend more than $14 billion on mobile apps and services. Mobile network operators would be better served trying to maximize revenue from popular mobile apps, including TV, music, books, newspapers, games, location-based services and social activities, as opposed to charging higher rates for data usage, according to Parks.
“Moving mobile users to usage-based plans will be difficult and painful, but changes are necessary for operators to maintain revenues,” Wang said. “Operators would benefit by recasting mobile data services as experience-driven—like many of their OTT competitors—in order to reduce consumers’ price sensitivity, fend off competition, and keep their mobile data revenue engine humming for the long run.”
Image courtesy of flickr user Sean MacEntee.
