Telecoms should pay attention to network speeds (VZ, TMUS, T)

High Network Speed Must Have

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A high-speed mobile network beats out unlimited data as the “must-have” feature for consumers, according to BI Intelligence’s exclusive Digital Telecom Consumer Survey.

Overall, 84% of consumers said that a high-speed mobile network is the most important offering to consider when selecting a wireless provider — well above the 68% who said unlimited data. The results are surprising considering that unlimited data is the focus of most carriers' mobile offerings.

Here's why consumers now value network speed over unlimited data:

Consumers are viewing more and more video content on mobile, and that means they need more data. And this trend is set to compound — mobile video is expected to reach nearly 75% of global mobile data traffic by 2021, up from 50% in 2016, according to Ericsson.
To meet consumer demand, carriers are bringing back unlimited data packages. Verizon, for example, reintroduced an unlimited plan after suffering substantial customer losses in Q1 2017. The telecom lost a net 289,000 postpaid phone customers, but said it was on pace to lose nearly 400,000 users prior to its unlimited plan launch. The new offering successfully curbed the flow of departures.
Mobile video consumption relies on data and network speed — since consumers have access to unlimited data, network speed has come to forefront of demand. Consumers now consider a high-speed network the must-have feature.
So although consumers value unlimited data, they now value network speed more. While consumers may have switched carriers for unlimited data in the past, they now rank network speed as the No. 1 must-have, and this could present an opportunity for carriers.

Additionally, telecoms' unlimited data plans actually do have limits — to offer these plans, telecoms throttle network speeds. Carriers are struggling to maintain network quality while meeting the growing demands of their unlimited data subscribers, according to a report by Open Signal. Some telecoms, like Verizon and AT&T, have opted to offer unlimited data plans that deliver high-bandwidth mobile content, like mobile video, at reduced speeds, to stave off the strain caused by growing mobile video consumption. Throttling likely exacerbates consumers' existing demand for faster network speeds.

While 5G, the next generation of mobile networking technology, will support the boom in streaming mobile video, it's still a long ways off. 5G technology is expected to increase mobile network capacity by 1,000 in 10 years compared with today’s 4G networks, according to estimates from the Institute of Electrical and Electronics Engineers. In the meantime, carriers will continue to find ways to accommodate growing demand for mobile video to win subscribers.

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