consumer communication services preferences: the new quad play is a dual play
TRANSCRIPT
Frost & Sullivan’s Consumer Survey
Reveals Voice and Video Must Surrender
to Wireless and Broadband
Research PREVIEW for the
Consumer Communication Services
Preferences: The New Quad Play is a
Dual Play SPIE
@FS_TVision
Consumer Preferences: Relative Importance of Services
What communication services do residential consumers want? Data
from the recent survey indicate that when asked to rate the importance
of the four quad play services (voice, video, Internet access, and
wireless), as the below figure indicates, Internet comes in first, followed
by wireless, subscription video, and voice.
Source: Stratecast analysis.
0.0
1.0
2.0
3.0
4.0
5.0
Local landlineSubscription
TVWireless
Internet
3.8 4.0 4.14.7
Me
an S
core
(Sc
ale
of
1 t
o 5
)
Service
N=1,980
Consumer Preferences: Reasons for Dropping
Conventional Voice Services
When the respondents who dropped their service were asked why they dropped it, the
results are notable. As the below figure shows, the primary reason was that they had a
cell phone. The second most likely reason was that the price was too high. Now, it can be
argued that landline telephone service is far less expensive, generally, than cellular
service, but it is important to remember that this is a consumer perspective based largely
on an assessment of value. As will be discussed in an upcoming analysis on share of
wallet, the pricing for the various services does not currently match the value assessment
for those services.
Source: Stratecast analysis.
N=520
0%
10%
20%
30%
40%
50%
60%
Pe
rce
nto
f Sa
mp
le
Consumer Preferences: Smartphone Ownership
However, the real story in wireless is that it is increasingly a medium for the
delivery of data-based applications. Smartphones increasingly characterize
consumer wireless communications, and consumers increasingly use
smartphones to access the Web and to send and receive text messages (a
data type).
Source: Stratecast analysis.
N=1,873
Smartphone 51.6%
Standard feature phone46.8%
Don't know1.6%
Consumer Preferences: Relative Use of Entertainment
Services
On average, interview subjects watched approximately 16 hours a week of television
programming. However, they also surfed the Web more than 12 hours a week, on average.
Combined with time spent on social networking (more than four hours a week), Internet
usage is now in excess of conventional television viewing for most consumers with a data
connection. Moreover, the dynamic of consumer value assessment is now anchored by
their data connections, rather than their video subscriptions. More to the point, this
dynamic implies that the precise mix of programming in a video subscription is becoming
less persuasive to a prospective subscriber than the extent a data connection enables
other online activities.
Source: Stratecast analysis.N=2,029
0%
2%
4%
6%
8%
10%
12%
14%
16%
18%
Watching television
Surfing the web/Internet
Social networking
Playing video games
Pe
rce
nt
of
Sa
mp
le
Integrated Services in the Dual Play
As noted in the analysis, the new
dynamic requires a service-centric
perspective by the operator; but more
importantly, it requires a seamless
service experience. This means that
the consumer will transfer a service
session from a local landline
broadband connection to a
smartphone, and vice versa; and the
service session must persist across
that interface. Ideally, session
persistence exists because the
operator is providing the service
application suite, with the experience
working the same way across multiple
broadband services.
Source: Stratecast analysis.
Executive Summary—CEO’s Perspective
2Especially in the area of pricing, operators need to recognize the attributes of value that are important to consumers, and price accordingly.
3
As services evolve to be applications, similar to the applications that consumers routinely download to their smartphones, this dynamic requires a much different market approach by network operators.
4
Operators must invest in a universal service delivery infrastructure, and apply their expertise in management and billing systems to extract revenue from the value transfer equation.
1
Consumers are beginning to focus on the utility of their broadband connections, and are beginning to look at service offering as over-the-top applications that utilize those connections.
Source: Stratecast analysis.
The Consumer Communications Market
The evolving consumer communications market is focused on providing communications services to residential consumers. Increasingly, this is an exercise of creating services in the cloud, and then delivering them to the consumer over broadband connections that can be either wired or wireless.
This analysis focuses on consumer perceptions revealed during the last Consumer Communication Services Preferences survey.
Details of the Full Analysis
Contents
Section Page Number
Executive Summary 5
Introduction 6
Consumer Preferences 7
• Basic Telephone Service: Not Quite Dead Yet 9
• Subscription Television: A Declining Notion 12
• Broadband: The Evolving Everything Service 14
• Wireless: A new Mobile Dynamic 15
Services are Just Applications 18
A Dual Play World: Broadband and Wireless 20
Implications for the Network Operators 21
Demographics 23
The Last Word 25
List of Figures
Figure Page Number
Figure 1: Relative Importance of Services 7
Figure 2: What Services Consumers are Consuming 7
Figure 3: The Importance of Bundling 8
Figure 4: Service Package Preference 8
Figure 5: Importance of Bundle Characteristics 9
Figure 6: Satisfaction with Landline 10
Figure 7: Cutting the Cord 10
Figure 8: Reasons for Dropping Conventional Voice Services 11
Figure 9: Reasons for Retaining Landline Service 12
Figure 10: North American Video Subscriptions (Third Quarter, 2007-2013) 13
Figure 11: Satisfaction with Subscription TV 13
Figure 12: North American Internet Subscriptions (Third Quarter, 2007-2013) 14
Figure 13: Satisfaction with Broadband 15
Figure 14: North American Wireless Subscriptions (Third Quarter, 2007-2013) 16
List of Figures
Figure Slide Number
Figure 15: Smartphone Ownership 16
Figure 16: Number of cellular phones 17
Figure 17: Satisfaction with Wireless 18
Figure 18: Streaming Video Use 19
Figure 19: Internet Speed 20
Figure 20: Relative Use of Entertainment Services 21
Figure 21: Integrated Services in the Dual Play 22
Figure 22: Demographics 24
Market Overview—Key Questions This Study Will
Answer
What communication services do residential consumers want?
What services are consumers consuming?
How important is bundling services?
How satisfied are consumers with the different communication services, and how is this impacting purchase decisions?
What are the trends related to cutting the cord, and how will they impact future service offerings?
What are the implications for network operators?
Source: Frost & Sullivan analysis.
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Britni MyersCorporate Communications
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Research Author
Lead Analyst:
Mike Jude, Ph.D.Program Manager Consumer
Communications Services Stratecast | Frost & Sullivan
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