Connection speed is the most important factor in eight out of ten global markets, according to a recently published survey. Of consumers worldwide, 61% say faster download would increase their satisfaction with the mobile web, and 33% demand the same functionality from mobile websites as they do from PC websites.
In a related development, Lithuanian operator Bite just upgraded its network to increase its mobile internet speeds. Users with 3G modems can experience up to 90 percent faster internet, while owners of newer smartphones will have double the speed. Those with older smartphones will still see a 20% to 30% jump in speed.
The survey’s results do not surprise us in the least. Consumers have long been expressing their desire for faster connection speeds, as without them one cannot have an enjoyable or productive smartphone, tablet or USB modem experience. Most operators, like Bite Lithuania, recognize the importance of speed – particularly download speed – and act accordingly. Those that have not yet done so must allocate the necessary funds to upgrade their networks or risk quickly becoming uncompetitive. In our view, an operator cannot compete without offering at a minimum top 3G speeds, and even those may soon become obsolete with the ongoing worldwide rollout of LTE. Ultimately, everybody has to offer LTE/4G speeds to accommodate the emerging data-rich formats for apps, games, music and more.
Notwithstanding the importance of speed, we also believe that data allowance, if not of equal importance, is at least a close second. Having a high speed connection without a sufficient data allowance is like having a fast car without a road on which to drive it. So operators need to keep this basic fact in mind and, in our view, offer attractive, creatively designed and affordable data plans. We believe they can earn a solid return on investment, even on affordable data plans, provided these plans are structured correctly – specifically to include relatively high priced excess-usage charges. Ultimately, a sizable number of subscribers will exceed their allowances, regardless of fair usage/limitation warnings that are now mandated by law in many markets, potentially resulting in a considerably greater amount of revenue being generated from such “affordable” data plans.