The appetite of users for 4G mobile offerings

Deloitte has recently published its survey on mobile uses 2013 in France. This study provides many metrics regarding mobile users’ behaviors in France in comparison with 2012.

Of course, there is a clear increase of smartphone ownership and data service use as is the case worldwide, and a large decrease in costs with the entry of Free Mobile, a French particularity.

The interviews took place in June, at a very early stage of 4G roll-out in France. So there is some prospective data page 27 regarding 4G. What is striking is that a large majority- 57% of the users do not intend to migrate to 4G. They do not seem to be much impressed by the benefits of speed for 4G. Especially as users favor more and more WIFI connection for data (54%) instead of mobile networks (page 25) for their smartphones, so mobile network speed becomes less of an issue.

In my previous posts, I already tried to highlight the fact that reducing the benefit of 4G to a better speed is, I believe, a very wrong way to promote this technology which provides us with a complete new paradigm: 4G is not a quicker 3G service, it provides a complete new user’s experience (see my post)

Fact however is that the only way 4G is currently marketed in Europe is through this higher speed benefit to the users; and indeed, the Deloitte study for France page 27 and 28 tries to figure out users appetite for 4G to better speed, with no other potential benefits proposed. So in the mind of users 4G=higher throughputs; so it makes sense that if users do not foresee strong additional benefits for higher speed, they are not prepared to pay more for it.

Interestingly, the survey of Deloitte on the UK market gave a different view of 4G acceptance by UK users: almost half (46%) of the respondents in the UK saying that they are likely to choose a 4G phone as their next phone. But market conditions and expectations in UK seems to me indeed very different to France: current data tariffs in UK have usually limited schemes unlike France. And while mobile operators in France officially expect subscription prices to go up 5-10 € with 4G, the prospect seems to be different in the UK: the latest operator “3” in the UK states that 4G tariffs will not be increased compared to 3G. So if 4G will be at the same price as 3G but quicker, why shouldn’t users migrate then?

So besides early adopters ready to pay a premium for 4G services whatever happens,  it may be difficult for mobile operators to convert to 4G with a premium: we will be able to witness the race – already started this month in UK, starting next month in France- between mobile operators and their successes in migrating customers to 4G(at what price).

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