Surveys: 56% use mobile phones to access the Internet; but many give up if they face problems

- Gary Thayer, Editor

Nov. 3, 2005 -- (MobileVillage) -- Two separate studies released today of mobile phone users conclude that while more people are trying mobile data services, many are still put off by high prices and problems with ease of use.

In one study, commissioned by another wireless operator service provider called Olista, found that many users give up if they experience trouble with mobile data services. In the study of 1000 adult mobile phone users conducted by research firm NOP, 64 percent of respondents who actually tried to use mobile data services said they'd give up trying after one or two attempts if they ran into trouble. Only two percent said they would seek help from the operator. About 25 percent said they'd continue trying on their own. The survey covered simple data services such as downloading games and ringtones and sending pictures.

A similar survey commissioned by Olista earlier this year found that 77 percent had never tried mobile data services and, of those who did, only 12 percent were happy with their experience.

About 53 percent of the respondents said they'd use more mobile data services if they were less expensive and 43 percent said they'd increase their mobile data usage if usability improved, Olista said.

A similar conclusion was reached by another study of 4,000 mobile phone users in 21 countries. The study, commissioned by wireless operator service provider Mobinet, conducted for the eighth consective time (since 2000) by consulting firm A.T. Kearney and Cambridge University, finds that mobile phone users are increasingly comfortable with mobile data services but continue to worry about content and price.

The Mobinet study found 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. Fifty-six percent 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 percent who said they did so in the 2004 Mobinet study.

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.

"The growing penetration of new multimedia phones is the catalyst for mobile data adoption," said Mark Page, A.T. Kearney vice president and leader of the Mobinet study. "There is a clear relationship between the average revenue per user 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."

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

Mobile entertainment services also continue to grow, according to the study. One-third of users with multimedia devices downloaded music monthly, up from 21 percent in 2004. Mobile gaming increased in Japan, the Americas and Scandinavia, but levels of repeat use so far remain below those of mobile music.

Globally, 16 percent of users with multimedia phones reported downloading mobile games at least monthly. Seventeen percent of users (and 27 percent of those under age 24) said they were willing to pay for mobile TV, the most recently touted mobile entertainment service. However, two-thirds of users expressed a desire for time-sensitive TV content such as news and sports rather than entertainment shows.

The study indicates mobile operators still face challenges in bringing the price and quality of data services in line with consumer expectations. One-third of mobile phone users are concerned about the cost of mobile data, and about half say they are not willing to pay more than $5 per month for it. Thirty-five percent of consumers cited poor content as the reason they don't access multimedia services, a considerable increase from just 8 percent in 2004.

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

The study recommends operators shift their marketing focus to encourage repeat use and service loyalty, using pricing along with improved content and customer interfaces. To win over new customers, A.T. Kearney expects operators to perform more extensive market testing, implement easier-to-use content-rich services and offer low price alternative packages. Indeed, 70 percent of mobile phone users say price remains the primary factor in choosing an operator.

"The study clearly indicates strong growth opportunities for mobile operators that provide value-added services and products targeted at specific customer demographics," Page said. "The days of operators being everything to everyone are long past."

The report on Mobinet 2005 can be found on atkearney.com.

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