AT&T, Verizon, Sprint, and T-Mobile are battling for subscribers — consumers say network speed is key to winning them over (VZ, TMUS, T, S)

High Network Speed Must Have

This story was delivered to BI Intelligence Apps and Platforms Briefing subscribers. To learn more and subscribe, please click here.

A high-speed mobile network beats out unlimited data as a “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 a need-to-have offering 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, network speed may be more important. While consumers may have switched carriers for unlimited data in the past, more now rank network speed as a 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.

BI Intelligence’s Digital Telecom Consumer survey examines consumers’ preferences and ratings of the major US telecoms and the features they provide. It rates Verizon, T-Mobile, AT&T, Sprint, and other mobile carriers on loyalty and user experience, and it looks at consumers' real must-haves. The full report is NOW available to BI Intelligence enterprise clients. To get access to this report, please email Matt Jackson (mjackson@businessinsider.com).

Join the conversation about this story »