MNO’s Report: Irish Smartphone Data Use Rose in EU

A report from Irish mobile operator Three shows that 37 percent of smartphone users in the country are using more mobile data while traveling in the EU, one year after the EU introduced new “roam like home” rules abolishing most roaming surcharges.

The report also states that among Irish smartphone users, Facebook remains the most popular app. Sixty-seven percent of these users says they believe the devices help them communicate more with friends and family, and 51 percent believe they make people safer. The report shows that 71 percent of respondents trust mobile security for banking and bill payment apps, and 55 percent value the use of smartphones to make cashless payments.

Back when the EC was debating the issue of roaming surcharges amid widespread user dissatisfaction, operators were expressing serious concerns about the impact of a rule change on their bottom line. If surcharges were abolished, connectivity revenue would go down, they argued, because operators would be paying termination fees while charging lesser amounts for service.

While the logic of that argument is clear, it ignores the potential positive effect of increased data usage on the equation, in that event that “roam like home” actually stimulated it to a sufficient degree.

If a substantial percentage (well over one third) of Irish smartphone users are consuming more data while roaming in the EU as against last year, that is a good indicator that at least in this market, roam like home has brought about a significant uptick in data use. And while we do not know Three’s exact revenue and cost amounts, it is likely that in terms of a trend, the end of EU roaming surcharges will eventually be a net positive for the operator, as for many others in the EU.

The other findings of the report—about the prominence of Facebook and the widespread customer endorsement of mobile banking and payment services—confirm what is already well known among operators, but as far as the roaming data use finding is concerned, we believe that it points toward a future in which operators in all markets embrace cellular “open borders” and capitalize on the ever-increasing interest of travelers in accessing high-speed data wherever they may be, and in large quantities. And in areas where surcharges still exist, offering generous roaming-data packages is a very good way to go, for the present time.

Tarifica is the global leader in monitoring and analyzing telecom pricing. Covering hundreds of operators in every region of the globe, Tarifica’s databases of mobile and fixed line data and voice tariffs are among the largest and most in-depth in the world. Tarifica is also a leading publisher of benchmark and other pricing reports, and its analysts are recognized authorities in the telecom industry, relied upon by operators and businesses worldwide for pricing insight and guidance.  

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UK Regulator Issues Report on Speed and Coverage

Ofcom, the U.K.’s telecom regulator, has issued a new report on the state of mobile broadband. It is based on the results of roughly 210,000 tests from five major cities—Birmingham, Edinburgh, Glasgow, London and Manchester. The study included the U.K.’s four largest MNOs—EE, O2, Three and Vodafone—and ranked them on the following metrics: average download and upload speeds (see graphs below), average time to load a web page and average latency (all of these for 3G and 4G). Also included in a separate section of the report were assessments of each operator’s current 3G and 4G coverage for June 2014 and October 2014. While the results were mixed across the multiple statistics, the strongest performer was EE, which posted the fastest 3G and 4G download speeds, fastest 4G upload speed and highest coverage percentages. With regard to the study, Ofcom Chief Executive Ed Richards stated, “Improving mobile quality of service is an important area of Ofcom’s work. Our research both incentivizes mobile providers to offer a higher quality of service while helping consumers choose a mobile package that best suits their needs.”

Unsurprisingly, the operators that did not perform particularly well have already issued statements calling the study’s results into question. While we appreciate that other operators might have performed better if a different set of cities had been chosen or if more rural areas had been included, we believe the data collection techniques and metrics used in the Ofcom study are statistically sound and that its results provide a relatively comprehensive picture of mobile broadband service in the U.K.

We applaud Ofcom for undertaking this type of serious study and publishing the results in a format accessible to laymen and believe that this represents a strong example of regulatory best practices. We have often criticized regulators for being overly involved in dictating mobile prices and service/coverage thresholds. While these goals are admirable, these kinds of top-down regulation are too often heavy-handed, inflexible and counterproductive. This newest Ofcom study represents a smart step in the other direction. The greatest challenge for consumers in the mobile ecosystem is the abstractness of the product—such things as download speed, network latency and 4G coverage are not intuitively obvious to many—and it is in the interest of each operator to advertise only the metrics in which its network performs best.

Most consumers are capable of weighing the benefits of increased coverage or speeds against greater monthly costs or reduced allotments, but what stops them is the fact that available information is often limited, contradictory or derived from suspect sources. By conducting a thorough survey and publishing the results, Ofcom is creating an environment in which each operator has every incentive to improve its network’s performance, since they know that its progress will be tracked and reported on by an independent actor. We believe that this program will help the U.K. increase its mobile broadband speed and coverage much faster and at much lower cost than the traditional top-down approaches. 

The above item appeared in a recent issue of The Tarifica Alert, a weekly resource that analyzes noteworthy developments in the telecoms industry from around the world. To access all of the latest articles and issues or to speak with the research team: http://www.tarifica.com/contactus.aspx