Are U.S. Mobile Users Paying Too Much?

The United States tends to fall in a band of countries that charge higher prices to individual wireless consumers for everything except pure voice service where prices are comparable, a study by the New America Foundation finds. read the full study here. 

So are U.S. mobile users paying too much?

The question is harder to answer than you might think, despite the New America Foundation findings.

Taking a look at single-user plans, the foundation finds that "across postpaid and prepaid voice plans, Canada, U.S., U.K., and Japan mostly fall in the high to middle price tiers while India, Hong Kong and Sweden fall in the low price tier."

The United States is in the highest price tier in the postpaid and prepaid text plans sharing space with U.K., Canada and Denmark while Sweden, India and Japan fall in the lowest price tier, the foundation says.

Finally, Japan, Hong Kong, U.S. and Canada feature in the high to medium price tiers while India, Sweden, and U.K. emerge as winners in the low price tier, the New America Foundation says.

In Canada and U.S., consumers have the highest minimum monthly charge for a complete postpaid cell phone service at $67.50 and $59.99 respectively. Other countries that follow a similar cost structure at lower rates are U.K. at $32.40, Denmark at $39.00, and Finland at $40.10.

These costs are based on plans where consumers are charged for a preset amount of voice minutes, texts, and/or data amount irrespective of the minimum amount of service they use. Significantly, the comparisons also are made of rate plans available to individual consumers.

Within the United States, in 2006, fully 54 percent of adult mobile users subscribe through a family plan, according to the Yankee Group. That was up from the percentage of users on family plans in 2005, when 49 percent of adult subscribers were on a family plan.

Eighty-one percent of all mobile-using teens were on a family plan in mid-2006, up from 75 percent in 2004, the Yankee Group found.

A reasonable estimate might be that 60 percent to 70 percent of U.S. users are now on family plans. That is important when comparing costs and plans across regions and countries of the world because the New America Foundation study compares individual plans, not family plans.

That isn't to say the New America Foundation study is "wrong." But it compares plans that most U.S. users are not buying.

The plans selected for study are important.  The Organization for Economic Cooperation and Development, for example, suggests that U.S. mobile prices are "high," based on a standard set of usage buckets, mirroring the New American Foundation study.

But there's a problem. Most U.S. users talk about four times as much as some Europeans do.

The problem is that the OECD study uses definitions of "low," "medium" and "high" use that might describe usage in the Netherlands, but are wildly inapplicable to typical U.S. usage rates, says George Ford, Chief Economist of the Phoenix Center for Advanced Legal and Economic Public Policy Studies.

Specifically, the OECD analysis calls 44 outbound minutes a month "low," 114 outbound minutes medium and 246 minutes outbound "high" levels of usage.

The average mobile consumer in the United States uses 800 minutes a month, about four times as high as the OECD "high usage" level. Furthermore, the OECD considers 55 text messages a month to be "high use" where the typical U.S. mobile user sends or receives 400 text messages a month.

Since usage plans are directly related to usage, this is an issue that distorts the comparisons, difficult to make under the best of conditions. By definition, the "average" U.S. user is a "high usage" customer. So if U.S. users kept the same behavior patterns, but had to buy plans as the OECD baskets suggest, they would have to pay rates commensurate with very-high usage levels.

In other words, if users in a given country have low usage, and are on low usage plans, then average prices paid will tend to be "lower." In the United States, usage is vastly higher than in Europe.

Normalizing for usage volume, what one finds is that U.S. users pay modest prices for much-higher use. If users in the Netherlands had consumption patterns identical to U.S. mobile users, they would pay very-high prices.

In other words, one cannot simply compare low-usage plans in one country with high-usage plans in another, any more than one can compare low-usage plans in one country with high-usage plans in the same country. Nor can one compared plans that most users do not buy, and produce results that are terribly meaningful.

Social Media Clutter Grows

Social media is more popular than ever (81 percent of U.S. online users engage with social tools at least once per month), but that popularity also increases "clutter" in the space, making it harder for marketers to stand out in a busy environment, says Nate Elliott, Forrester Research analyst.

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The average U.S. Facebook user has 135 friend connections on the site, and MySpace and Twitter users aren’t far behind, with MySpace users having an average 107 connections and Twitter users an average 77 connections.

In addition, nearly 75 percent of online users consume other social content outside of social networks, like blogs posts and YouTube videos. Younger users are even more active than the averages suggest.

Also, most users don’t check their social feeds that often, Elliott says.  Despite the lingering stereotype of Facebook and Twitter users being tethered to their computers, the average social network user logs in only every few days, with Facebook users checking in less frequently than users of other popular networks.

From a marketing standpoint relatively few online users become "fans" of brands’ social networking pages. With more than 500 million people around the world using Facebook, and with nearly every business having started its own Facebook page, you probably could’ve guessed that social networks are by far the most common social technology through which consumers engage directly with brands.

But even this type of engagement remains disappointingly rare. Just 18 percent of U.S. online users have become “friends” with or “liked” a brand on a social network in the past three months.

Users are even less likely to engage with brands on less-popular social platforms. For instance, only eight percent have been to a brand-sponsored social network recently, while just six percent have read a brand’s blog. Only five percent of online users have followed a brand on Twitter in the past three months.

If such low levels of engagement continue, it will become difficult for marketers to justify dedicating budget to social channels. In fact, this challenge is already becoming evident: The majority of the large interactive marketers we survey say they’ve chosen not to increase their social media marketing budgets from 2009 to 2010.

With clutter growing, and with social networking users much more interested in engaging with each other than with brands,  interactive marketers have two options for reaching their audiences through social media: cut through the clutter, or  avoid it altogether.

And though many marketers try to fight through social clutter, this strategy is fraught with danger because most marketers simply aren’t interesting enough. Unless a marketer is blessed with genuinely unique content or a breakthrough creative idea, it remains tough to cut through the clutter.

It also costs money to get users’ attention on popular social networks. Although many marketers still think of social media as a “free” strategy, we rarely see successful social programs that didn’t involve some form of paid promotion, says Elliott.

Nothing is ever too easy in the online and mobile marketing business, it seems.

19% of North American Enterprises Expanding Carrier Ethernet Adoption This Year

About 29 percent of  North American enterprises surveyed by Forrester Research say they already have deployed carrier Ethernet services and 19 percent are expanding their current deployments.

So just a bit under half of North American enterprises already are buying carrier Ethernet services, with a bit more than half of the enterprises still to buy their first carrier Ethernet services.

In 2009 about a third of North American enterprises were purchasers of carrier Ethernet, representing growth of about 14 percentage points in 12 months.

About 51 percent of North American enterprises use Ethernet for access. About 19 percent have implemented a network based on Ethernet point-to-point circuits. By the end of 2010, this will have grown to 31 percent.

Some 16 percent of North American enterprises have moved to a network based on Ethernet multipoint services. By the end of 2010, this proportion will have risen to 26 percent.

- Sony Ericsson to stop using Symbian

Sony Ericsson is to stop making smartphones featuring Nokia’s Symbian operating system, meaning Nokia will be the only significant manufacturer to use Symbian. Obviously, that means the end of the effort to promote Symbian as an open source platform.

Sony Ericsson said on Friday that it wanted to focus on using Google’s Android and the Microsoft Mobile operating systems for its smartphones.

FT.com / Technology - Sony Ericsson to stop using Symbian system

Mobile is Most-Owned U.S. Gadget

Of what it calls the "seven key appliances of the information age," the mobile phone is far and away the device of choice for U.S. consumers, say researchers at the  Pew Research Center’s Internet & American Life Project.

Fully 85 percent of Americans now own a cell phone, including 96 percent of people 18 to 29 years old.

About 76 percent of Americans own either a desktop or laptop computer as well. Since 2006, laptop ownership has grown dramatically (from 30 percent to 52 percent) while desktop ownership has declined slightly.

Just under half of American adults (47 percent) own an MP3 player such as an iPod, a nearly five-fold increase from the 11 percent who owned this type of device in early 2005, the Pew Research Center says.

Game consoles are nearly as common as MP3 players, as 42 percent of Americans own a home gaming device. Parents (64 percent) are nearly twice as likely as non-parents (33 percent) to own a game console.

Tablet computers and e-book readers, as you would expect, have not reached those levels of ownership, yet. However, these devices are proving popular with traditional early adopter groups such as the affluent and highly educated, the Pew Center reports.

Ownership rates for tablets and e-book readers among college graduates and those earning $75,000 or more per year are roughly double the national average.

Steve Ballmer Explains Why College Grads Should Work for Microsoft

 Steve Ballmer gets asked by a Seattle audience why college grads should go work for Microsoft instead of some other firms one might think of.

Half Of Broadband Users ‘Don’t Care’ About Speed

Almost half of U.K. broadband users don’t care how fast their Internet connection is, as long as it works, a new survey has found.

In a study of 5,200 U.K. consumers carried out by YouGov and commissioned by BSkyB, only 30 percent said they were frustrated with the consistency of their Internet speed, with 44 percent claiming they “don’t know” or “don’t care” how fast their connection is.

Meanwhile, just six percent said that speed alone was important, with 39 percent preferring value for money and 36 percent claiming that customer satisfaction was their top priority.

“What this research has done is to cut through the noise around broadband speeds and listen to what the majority of broadband users say about what matters to them,” said Delia Bushell, Sky’s Director of Broadband and Telephony. “In short, people want broadband that works, transparency over what they are getting, and a price that suits their pocket.

Those results are consistent with some studies of U.S. consumers as well. "Speed" often seems more important to service providers as a marketing platform than it is to buyers of broadband access services, who seem to be signaling by their buying, not just their attitudes when surveyed, that beyond a certain point, additional speed doesn't provide enough value to justify spending the extra money.

Half Of Broadband Users ‘Don’t Care’ About Speed | eWEEK Europe UK