European Mobile Customers Are Willing to Pay for New Services

Among the fears communication service provider executives sometimes have is that customers will not pay for better service or new features. A new survey of 2,500 mobile subscribers by Amdocs, including mobile consumers in five European nations suggests subscribers are willing to pay for an improved customer experience and new services.

Fully 90 percent of Russian subscribers indicated they are willing to pay higher premiums to receive the products and services they want.

Only 30 percent of subscribers from all of the surveyed countries said they would be unwilling to pay for additional services.

Connectivity and the ability to make mobile payments were cited by European consumers as the top reasons they would increase their mobile usage. Subscribers also expressed a willingness to pay a
premium for the ability to consume all services from any device and for a single data bundle option.

Forty-three percent of respondents from all five European countries viewed connectivity as the most important industry development of the next decade.

Fifty-two percent of surveyed Russians and more than half of the Germans felt connectivity and synchronization between all devices would be the most important development of the next 10 years, and
almost 50 percent of German end users felt that the connected world would encourage them to increase their mobile usage.

In the U.K., more than 70 percent of respondents cited connection to other devices as the first or second most influential factor in increasing their mobile consumption.

European respondents chose improved network quality as the service they would be most likely to pay a premium for and 46 percent said this is the aspect they would most like to change or improve about their current mobile reality.

Users in the United Kingdom are most likely to pay a premium for increased network quality (39 percent) and 50 percent of surveyed consumers in the United Kingdom cited network improvements as their top concern, reflecting a growing reliance on access to mobile communication and information wherever they are.

The survey also included subscribers in France, Germany and Sweden.

As with all such surveys, there often is a difference between what consumers ay they will do, and the ways they actually behave.

Still, as with any product, the notion that customers will not buy new features, products or applications can be wrong. Whether they will, or will not, depends on the value of the innovations and the cost of using those new innovations.

Nobody seems to think "paying" is an issue with iPhones, iPads or virtual goods used in online games. What service providers must do is what all suppliers must do: create more compelling products.

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In 2 Years, Mobile Bills Will be Based on Data, Not Voice Buckets

Sprint Nextel Chief Executive Dan Hesse said that in about two years, monthly mobile phone bills will focus on the amount of data used and move away from the number of available voice minutes.

Of course they will. The entire global telecom business is migrating from a voice revenues model to a broadband revenue model. Along the way, some voice services or applications will be offered at no incremental cost, or very-small amounts of money. In other cases access to voice services will simply be bundled with other features and services, much as one today can buy, for one flat price, unlimited mobile Web access, text messaging and voice.

That doesn't mean data usage will billed as electricity, water or natural gas are. It does mean retail packaging will shift, over time, to methods that emphasize "access" to a network and many services, rather than a simple metered approach.

Observers rightly note that most U.S. consumers do not like strictly-metered usage for the simple reason that it creates billing variability. Consumers prefer the predictability of fixed monthly charges, which accounts for some of the popularity of "buckets of usage." But that doesn't necessarily mean people object to some broad correlation between intensity of usage and the size of monthly bills.

Hesse's comments also reflect the simple reality that, for many people, voice is less important compared to texting, instant messaging and other things that can be done with a mobile device. Hesse is only saying that end user value should be related in some rather obvious way to retail pricing.

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