Note to Operators: Don’t Neglect the Basics

Note to Operators: Don’t Neglect the Basics

At the end of the first quarter of 2013, 62 percent of German mobile-phone owners had a smartphone, up from 54 percent at the end of the third quarter of 2012, according to a recent report. Total penetration of mobile phones in the German market was 94 percent. The survey also found that the most popular function among smartphone users is SMS but the use of social networks, games and IM services is growing as well: from 46 percent in Q3 2012 to 52 percent for social networks, from 29 percent to 36 percent for mobile gaming and from 28 percent to 35 percent for IM services.

Samsung leads the whole mobile phone market in German with 37 percent, followed by Nokia with 18 percent and Apple with 13 percent. In the smartphone market specifically, Samsung is also the leader with a 41 percent share, followed by Apple with 21 percent and HTC with 11 percent.

Tarifica’s Take

The fact that smartphone ownership grew in Germany over the last two quarters is good news for manufacturers such as Samsung, Apple and Nokia. However, the 62-percent penetration figure should cause MNOs to sit up and take notice of something that is not often discussed by media commentators—there is still a very sizable contingent of non-smartphone users out there, even in technologically sophisticated, forward-thinking and affluent countries like Germany. The fact that 38 percent of mobile phone owners there are using “dumb phones,” we believe, means that operators cannot afford to neglect the basic services of voice and text. In fact, according to the survey, even among smartphone users, SMS is still the most frequently used function.

While we have emphasized, in many recent stories, the growing data hunger among consumers, and while there is no doubt that apps, games, music and other kinds of rich content are key to safeguarding the future of mobile services, traditional phone services are by no means a thing of the past. Germany is a mature market, with mobile devices in the hands of 94 percent of the population, and yet more than a third of Germans continue to favor phones with only basic functionality. MNOs there—and all over the world—would do well to remember that they need to continue to provide high-quality voice calling and texting at appealing rates in order to retain customers—and even to attract new ones. In marketing LTE networks, we think they should point out their ability to provide better voice quality, not just faster data downloads. Of course, it is essential to innovate at all times, but operators should not neglect the basics.