Ericsson ConsumerLab releases report on mobile broadband usage in China

Mobile broadband1 services have recently been introduced in China, attracting early adopters in mainly Tier-1 and Tier-2 cities2 User experience is highly dependent on the device used Speed, network stability and prices are keys to user satisfaction Ericsson ConsumerLab’s new study on the Chinese market clearly indicates that mobile broadband is quickly gaining traction despite its late entry to the market. The report also indicates, among other things, that at this early stage of 3G development, the current Chinese mobile broadband users covered in our study regard mobile broadband as a complement to fixed broadband and prefer the two services to be combined in a single package from the same operator/service provider. It also suggests that smartphones’ potential will be determined by offerings and price. The 2011 Mobile Broadband in China study was conducted during July and August of 2011. More than 2,200 internet users in all Tier-1 and Tier-2 cities in China were interviewed, 1,300 of whom are mobile broadband users. The study aims to understand users’ attitudes toward and perception of mobile broadband, how mobile broadband is used today, and drivers and barriers for further mobile broadband adoption. It also investigates the roles different devices play in accessing the internet and, in particular, focuses on how newly emerged mobile devices such as tablets and smartphones3, are affecting user behaviors and network choices in China. Mats H. Olsson, President of Ericsson China & North East Asia, says: "Ericsson is the undisputed global market and technology leader in mobile broadband, which has now entered the China market. I’m very happy to see this report focus on this dynamic and promising market. I hope that, via our professional market insight and concrete suggestions, we can provide even better services for Chinese operators and consumers alike." 1. Mobile broadband is a service that offers users wireless, high-speed internet access (based on 3G or above network technology) on a computer or a mobile phone. This service can be used wherever there is mobile phone coverage, either inside or outside – in other words, it is not restricted to certain areas such as "hotspots" or similar. 2. Tier 1: Beijing, Shanghai, Guangzhou and Shenzhen. Tier 2 cities include most of the provincial capitals and some developed costal cities. 3. A smartphone is a multi-functional device running an operating system such as Apple’s iOS, Google’s Android or Microsoft’s Windows Phone. Mobile broadband users Mobile broadband has been available for some time now and users in developed markets are no longer early adopters, but rather early followers. In China, however, users are early adopters (as shown in the chart below). These users are highly mobile, bold about trying new things, well-educated, young, socially active, well-informed, and willing to collect information about new products. Tablets and smartphones are increasingly used to access the internet The study has found that, in addition to laptops and netbooks, tablet computers and smartphones are frequently used to access mobile broadband. Different devices serve different user needs. Laptops are mostly used at fixed locations for planned and continuous internet access because they offer high data-processing speeds and relatively large amounts of storage. Smartphones are mostly for fragmented, discontinuous and spontaneous usage due to their mobility, which enable users to gain quick access to the internet. Tablet computers are mostly for planned mobile use, since they offer an improved internet experience compared to smartphones, as well as enhanced mobility and longer battery life. In addition to smartphones, tablets and laptops, consumers also want their other devices to be connected to the internet. TV sets (22 percent), digital/video cameras (19 percent) and portable multimedia players (18 percent) top the wish list, with mobile broadband being the preferred service type for portable devices. Locations, devices and data usage Different devices are used to access the internet in different locations. The study has found that smartphones are the best devices for accessing the internet outdoors. The mobility of laptops is declining and users are now less willing to use them outdoors as they are relatively heavy. Tablet computers, meanwhile, are increasing both the variety of locations in which mobile broadband is used and the amount of data consumed, due to their improved mobility. The study also found that smartphone users are more inclined to opt for mobile broadband, while laptop and tablet users prefer fixed broadband to Wi-Fi. Mobile broadband users on smartphones spend 70 percent of their time on mobile broadband and 30 percent on Wi-Fi. Mobile broadband users on tablets, meanwhile, spend 49 percent of their time on mobile broadband and 51 percent on a fixed connection or Wi-Fi. Finallly, mobile broadband users on laptops spend 54 percent of their time on a fixed connection, 24 percent on mobile broadband and 21 percent on Wi-Fi. Compared with fixed broadband, mobile broadband traffic is low, as it is used for short time periods for intense bursts of interaction, such as browsing the news, searching for information and instant messaging. Challenges for the development of mobile broadband For mobile broadband users, the main factors that affect satisfaction and usage are price, speed, network stability and coverage. For both data card users and smartphone users, price is the biggest obstacle. It is not so much that the price is too high, but rather that they feel restricted in that they have to pay a fixed price for a certain amount of data or minutes of usage. When considering a data card service, users usually look at price, data caps and their own fixed broadband usage habits. If a mobile broadband service cannot match the coverage, network stability and speed of a comparably priced fixed broadband service, users will think that the mobile broadband service is too expensive. In addition, consumers are used to the idea of a monthly flat rate. In their minds, data usage should not dictate price. Smartphone users who are unfamiliar with mobile broadband think that the service is very expensive as the structuring of data packages is complex and they find it difficult to predict how much they will be asked to pay at the end of the month. Summary Mobile broadband services almost always come with data caps and users always assume that the caps are too low. However, the study found that 53 percent of data card users and 42 percent of 3G smartphone users have never used up their quota of data. On one hand, many users control their data usage carefully to avoid having to pay an extra fee for exceeding the cap. On the other hand, users do not know much about data traffic and find it difficult to gauge data usage. Therefore, providing a pricing plan that is not based on data volumes will increase data usage and, to a degree, attract more users. The availability of devices will also play a major role in determining the development of mobile broadband in China, where relatively few people own laptop computers. The study shows that laptop users are more inclined to use fixed connections to access the internet, while smartphone users prefer to use mobile broadband. Forty-three percent of smartphone users involved in the study say they are more inclined to use 3G networks, while 70 percent of interviewees think this is the best type of connection for smartphone users. In addition, the use of smartphones has increased the popularity of instant and interactive services, which also indicates that smartphones will become one of the major drivers of mobile broadband development.