Pacific Telecommunications Council

Focus on Issues:
The Impact of Network Quality on Use of Mobile Data Services

by: Elizabeth Fife, Principal Researcher & Morley Winograd, Executive Director, Center for Telecom Management (CTM), Marshall School of Business, University of Southern California. (Morley Winograd is a member of the PTC Advisory Council.)

The USC Center for Telecom Management’s annual survey of mobile phone users in the U.S. and Asia finds that the quality of America’s mobile networks continues to be a roadblock to user acceptance of more advanced services. Unlike Korea, Japan, and other leading markets, mobile phone users in the United States are not yet ready to use their cell phones for data services like m-commerce, searching for information, or even entertainment services, such as watching videos or playing games. Rather, they continue to use cell phones chiefly for voice communication, while they wait for improved service and better understanding of the benefits of mobile data services.

Average U.S. cell phone customers clearly care about the quality of voice calls. That makes it incumbent on providers to improve service quality in order to eventually interest consumers in high-end data services such as Web surfing, purchasing, and music and video downloads. The ability to make a voice call on the move is highly valued by consumers. However, until there is a higher degree of reliability and performance for voice calls, there is less interest in doing anything else with the mobile phone. Until voice quality and ease of use issues are addressed, the mass market will probably not show great interest in more advanced uses. In the three years that CTM has conducted this survey, this point has come through consistently.

Results from CTM’s Annual Survey of Mobile Phone Users
CTM’s annual survey of cell phone users tracks the usage patterns and preferences of cell phone users in the United States to provide a picture of overall demand for mobile data services. This survey is also conducted in Korea, Taiwan, Japan, Australia, Hong Kong, China, and other key markets around the world.
The survey looks at consumer attitudes towards using cell phones for sophisticated data service uses such as downloading videos and buying items. Data is collected about user demand for mobile services in order to measure mobile service usage, gauge cross-cultural differences in mobile services, and demonstrate the business implications for new service development.

The 2006 survey revealed that:

The chart below provides an international comparison of how frequently survey respondents from the various countries surveyed use wireless data services for entertainment-related activities. Interestingly, the majority of respondents from all countries do not use this type of service often.

The greatest amount of reported usage was in Korea and Japan, but even in these countries, only about one-third of respondents claim to use these services often. Taiwan, Australia, and the United States still see a majority of mobile data service users reporting that they do not often utilize mobile services for entertainment purposes. *

*all charts show percentage of response for each specific survey question.

We see uniform consensus across all markets. Clearly the majority of respondents from all countries do not regularly use mobile commerce services: the concept of making purchases with a mobile phone is not yet widely accepted by the survey respondents.

The three charts below show the stark difference in preferences between Korean, U.S. and Australian users.

As shown in the first chart below, Koreans use their phones for communication and fun, but not for work.*

*Fun services were defined as entertainment-related, including such activities as games, watching videos and music downloads. Communication is defined as text messaging, instant messaging or email, and work-related activity is defined as communication, information accessing or productivity-related applications that support one’s professional activities.

The chart below depicts Australians’ reported mobile data service use. While many Australians report using mobile data frequently for communication, the majority report almost never using the service for work-related activities or for fun.

Next we see American’s reported use of mobile data services. While the vast majority of users in America do not use mobile services for fun, their reported use of mobile services is rather evenly split between work and communication. Approximately one-third of respondents use mobile data services for work or communication frequently, and another third almost never use their cell phone for these purposes.

The three charts above which show reported work, fun, and communication usage by Koreans, Australians and Americans is interesting to compare. Americans are much more likely to use their mobile data services for work and communication, but not for fun. Australians are quite likely to use mobile data services for communication, but not for work or fun. Koreans are highly likely to use mobile data services for fun and communication, but not for work. This information suggests a relevant cultural factor to adoption of mobile data services, and may also help indicate which types of services will be likely to catch on in different markets.

IMPORTANCE OF “FUN” AS AN ATTRIBUTE OF A MOBILE SERVICE DECLINES WITH AGE

Below is a breakdown by age of the survey question asking the extent to which respondents want wireless services that are categorized as “fun.” The importance of fun seems to decline with age. In general, the younger the respondent, the more likely they are to believe that services should be fun, while the older the respondent, the less likely they are to value that aspect of mobile data services.

PERCEPTIONS OF USAGE – WORK/PERSONAL LIFE BALANCE

Koreans tend to see their mobile phone as something that supports their personal life to a greater degree than U.S. users. The two charts below show that Koreans use their phone for mainly personal or exclusively personal purposes. U.S. users on the other hand believe that they use their phone more for work.

Korea – Work Personal Life Balance

US – Work Personal Life Balance

Overall, these survey results do highlight U.S. consumers’ interest in the practical, useful side of data services, even though currently in the United States there aren’t many such services that meet this need. If there were, and overall service quality was higher for voice calls, there might be more uptake of services that solve problems and make people’s daily lives easier.

While users around the world are sensitive to price, demand nonetheless exists for content and services that are useful for everyday life. Even in markets where entertainment services are popular, such as Korea, there is interest in productivity related services as well.

The survey results also show that across several markets, (US, Japan, Australia) mobile phones are valued for communication activities. On the other hand, low use of m-commerce services is prominent across all markets.

ABOUT THE WORLDWIDE MOBILE DATA SURVEY STUDY

The Worldwide Mobile Data Survey Study (WMDSS) is a loosely organized consortium
of universities and research institutions located around the world. Initiated in 2002, the WMDSS project began with three member countries: Korea, Japan and Hong Kong, where mobile data services were offered at roughly the same time, with somewhat different outcomes.

The consortium conducts an annual standardized survey of mobile device users to learn about preferences, habits, and use patterns in key mobile markets. The 2006 survey represents the 5th time this survey has administered.

Current consortium participants for this yearly survey of mobile users in Asia US and Europe include Australia, Canada, China, Denmark, Finland, Greece, Hong Kong, Japan, Korea, Sweden, Taiwan, and the US. Each national member carries out the survey in their home country and shares the data with other consortium members.

The goals of the Worldwide Mobile Data Survey Study consortium are:

The Center for Telecom Management, founded in 1985, is a premier academic thought leader in the networked digital industry. By integrating education and research, facilitated through industry forums, CTM provides unique perspectives on addressing the challenges facing the Networked Digital Industry.

For further information, contact Elizabeth Fife, CTM Principal Researcher, at fife@marshall.usc.edu