High income earners interested in broadband triple play and converged services
So says a new BMI-TechKnowledge survey into the telecommunications usage and buying behaviour of high-income residential customers who had a fixed line, cellular phone and interent in the home. It also covers key emerging market trends in other Internet and cellphone technologies and applications as well as PC and electronic banking trends.
The report also gives insightful information for service providers as to what the level of interest amongst these consumers was in a triple play option, as well as possible future fixed/mobile converged services, which would typically make use of a converged, dual-function handset.
About one quarter of respondents was aware that they could have a PC bundled in with an Internet subscription. Although only a small portion had such a subscription the interest in such a service was high. These households have an average of two PCs and three active cellphone numbers – a substantial proportion of which are on post-paid contracts.
Surprisingly, over a third of respondents without a broadband Internet service said they "had no need of one", while almost another third expressed reservations about the costs associated with fast Internet access, and this is affecting broadband adoption. However, says BMI-T’s Tertia Smit, who authored the report, "South Africans are not generally known for having a strong ‘consumerism culture’, and this may rub off onto their technology services purchasing behaviour".
Interestingly, the satisfaction level was above 88% for all aspects of the Internet Service Provider service offerings – confirming Telkom’s assertion that customers are generally happy with their services. At the same time, the survey revealed that Telkom dominated the growth in the Internet space the last year.
While the high cost of broadband Internet services garnered the most media attention last year, the reality is that the Internet accounts for only 12% of the average high-income household telecoms spending, whereas a much larger amount is consumed by cellphone bills and voice calls. Not surprisingly, therefore about 35% of respondents said that they would most like to save money on their personal cell phone account, while further down the list of priorities came a desire to save on fixed line voice costs, followed by Internet usage.
Company subsidisation of telecommunications bills is a key spending enabler, and there is still room for further growth in this area. Interestingly, a large portion of respondents bring work home from the office, which has particular relevance to industry players that offer remote access and telecommuting solutions. A further while 21% of high-income households have within them someone running a full time business from home, which introduces an additional set of unique needs.
Usage of a range of sophisticated applications is far more prevalent on the Internet using a PC than is the usage of advanced cellphone applications. For example, Internet banking had about a 60% adoption level, whereas mobile banking lags far behind with only 8.5% of respondents using it.
While wealthy households continue to spend the most on telecoms services, the majority of their occupants probably don’t know how to send a photograph via their cellphones, let alone how to maximise value for their technology spending. In fact, adoption of nearly all advanced applications over a cell phone is still very low. Apart from voice, only SMS is widely adopted – about 54% of respondents estimated that they send SMSs at least once a day. The next most widely used cell phone application, namely taking photographs, trailed far behind, and this was followed by sending of MMSs.
Not too surprisingly, one group of users is not as blissfully ignorant as the rest, namely the younger generation. The survey showed the 16-25 year group’s cellphone application adoption profile and frequency of usage was the highest of the lot.
Despite the amount of advertising surrounding technologies like GPRS and 3G, awareness and adoption of these and other cellular technologies are still in an "early adopter" phase – albeit growing rapidly. Generally around half of the respondents replied that they did not intend to use these services, while most of the remainder has not yet given it any serious consideration.
VOIP adoption is still low, in respect of regular usage, although a surprising 14% have already tried it at least once, most of whom did so using Skype or another similar application – with most calls costing next to nothing. Over time, accelerating the rate of penetration of residential broadband could also help to unlock the possibilities of VoIP services in this customer base, which BMI-T believes will remain relatively low for the foreseeable future.
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