TORONTO – A recent survey from KPMG International suggests wireless subscribers are more willing to pay for broadband content if it means they can avoid having to view ads on their mobile devices. In addition, an increasing number of mobile customers are being turned off by content bundles that don’t let consumers pick and choose the applications they want.
Peter Greenwood, a partner at KPMG in Canada, presented some of his organization’s survey results at the Canadian Telecom Summit on Monday during an afternoon session on the mobile evolution.
“There were comments made during lunchtime today that ‘everybody loves to bundle’. Well, maybe not so much these days,” he said.
According to KPMG’s survey, the number of global respondents who bundle wireless data content on a subscription basis decreased to 39% in 2008, compared to 47% in 2007. Looking at the Canadian market, 53% of respondents currently bundle their packages of mobile subscription services, down from 59% in 2007.
On the other hand, one trend that saw an increase in customer interest was a willingness to pay for online content to avoid seeing ads on their mobile phones. In general, consumers are more accepting of ad content on their computers than their mobile devices, KPMG’s survey revealed. Specifically, 43% of mobile phone users said they were willing to pay for content to avoid ads, compared to 33% of computer users who were asked the same question.
While the ability to do mobile transactions, including mobile banking and payments, is of increasing interest to wireless subscribers, it appears a significant number of mobile users are simply not comfortable with the idea of using their phones for financial transactions. In terms of the global picture, 47% of respondents to KPMG’s survey said they were not comfortable at all with mobile phone use for financial transactions, citing security and privacy as their main concerns.
(Ed note: We’ll see how well that sentiment is maintained as this partnership, announced yesterday, grows.)
In North America, consumer discomfort regarding mobile transactions was even higher, with 66% of North American respondents saying they were uncomfortable with the idea of conducting financial transactions on a mobile device.
“If you’re looking at [mobile transactions] as a growth area…then you’re going to have to do something to get that message across to customers that, ‘Yes, this is okay,’” Greenwood advised wireless providers.
The mobile industry in Canada has its work cut out for it on many levels, in terms of satisfying customers, said Ken Campbell, CEO of new Advanced Wireless Spectrum licensee Globalive Wireless Communications.
“In terms of the situation we have here in Canada, we have a wireless penetration level that is well below where we should be, relative to GDP per capita. We have a customer base that is largely dissatisfied. So we have a real opportunity to create value and introduce innovative applications,” he said. Speaking about the wireless broadband market in particular, Campbell added: “Canada is lagging behind in mobile broadband. Data usage is low, relative to global rankings. The price of usage is high. It’s falling, but it is still high.”
The increased competition expected in the wireless market as a result of the recent AWS auction, combined with lower-priced mobile devices and faster content delivery, will greatly help to drive the industry forward, Campbell said.
David Neale, senior vice-president of mobility industry leadership at Telus, took exception to the characterization of Canada’s wireless market as lagging behind global players.
“There’s still some debate on whether Canada is actually quite behind,” Neale said. “Remember that Canada had one of the greatest tele-densities in the world in terms of fixed line. If you look carefully, countries that had very well-developed tele-density had a slower rate of penetration for mobile than, for instance, some of the countries where there was no (fixed line) infrastructure, so mobile was quickly adopted there.”
Neale added that Telus itself will be investing $950 million in its infrastructure in 2009 alone.
Michael Moskowitz, president and CEO of satellite radio service provider XM Canada, offered his perspective on the mobile industry, too, saying XM’s customers don’t want to access satellite radio in just their cars now.
“There are other ways that consumers want to access our content. They want to access it through a network, through their mobile phones. And so it was very important that we began to extend the reach of our rich content to mobile phones and Internet-based devices,” Moskowitz said.
“Getting that high-value content to mobile consumers is critically important to the success of the (satellite radio) category,” he said.
