MOBILE FUTURE CONSUMER CHECK-IN: WIRELESS BUSINESS MODELS AND GOVERNMENT OVERSIGHT

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1 MOBILE FUTURE CONSUMER CHECK-IN: WIRELESS BUSINESS MODELS AND GOVERNMENT OVERSIGHT Social Lens Research conducted a research study for Mobile Future to better understand wireless consumers receptivity to new business models and the role of government in promoting mobile innovation as policymakers contemplate new wireless regulations. Respondents were asked to evaluate the consumer benefit of potential new wireless business models, offer their opinion on the need for government oversight on the potential new models and weigh-in on whether more, the same level or less regulation was the best way to speed the arrival of new mobile products, apps and service choices. 1

2 TOP FINDINGS: There is no ONE mobile consumer. Consumers varied in their usage of mobile devices and overall wireless behaviors. As examples: o 66% regularly use a smartphone, and 35% regularly use a feature phone. o Additionally, 36% say they regularly use a tablet. o Consumer wireless habits reflect these varied device choices. For example: While 27% of consumers engage daily on a social network via their mobile, 43% have never done so, and While 24% stream/download music at least weekly, 74% say they rarely or never do. o and respondents who stream/download music and videos are much more likely to use smartphones and lead in usage of most mobile activities. 90% of consumers felt that the best way to speed the arrival of new mobile products, apps and service choices would be to maintain the same level (54%) or less of regulation (36%). Only 10% of consumers say their wired and wireless broadband habits are similar demonstrating awareness of mobile network differences. o 44% said they do not usually stream or download large files. o Among those who do bandwidth-intensive activities (stream and download video), many said they either wait to download large files when they are on their computer or Wi-Fi-network (47%) or stream movies and TV shows to their computer (36%) to avoid loading delays or using mobile data. 72% of consumers felt new business models would be beneficial to consumers. (Please refer to page 5 for a full list of business models tested) o 64% felt at least one of the business models tested would benefit consumers. o Another 8% indicated they would be open to other business models. o were more receptive to new models, with 79% picking one or more models as beneficial. o Respondents who regularly stream/download music or videos were also more likely to think these models were beneficial, 90% and 88% respectively. 88% felt that the government should not block or be involved in approving new wireless business models. o 56% felt the government should not be involved in approving new models. o 32% felt the government should NOT block new business models that save consumers money and/or better meet their needs. o 10% felt that the government should block these kinds of new business models because they unfairly favor well-funded companies over smaller start-ups. Data traffic will likely continue to grow as 62% expect to use mobile more in the future. and users who stream/download are most likely to drive the most growth. 74% of and 82% of respondents who stream/download music or videos weekly expect to use their mobile devices more in the future. 2

3 DETAILED DATA FINDINGS: RESPONDENTS DISPLAYED DIVERSE WIRELESS HABITS WITH MILLENNIALS AND RESPONDENTS WHO OR STREAM MUSIC OR VIDEOS OVER INDEXING ON USAGE. More than half of the respondents send texts (69%) and surf the Internet (56%) at least weekly. and respondents who streamed/downloaded music or video at least weekly over indexed on the use of mobile across most activities surveyed. Q.1a: How often do you do the following on your mobile device? (At least weekly) Send texts 69% 87% 94% 91% Surf the Internet 56% 76% 91% 94% Participate on a social network 41% 63% 76% 79% Get news alerts/read news 42% 49% 70% 76% Play games 40% 50% 70% 64% Download and use apps 41% 57% 80% 78% Bank/manage finances 35% 50% 67% 66% Stream or download music 24% 42% 100% 63% Stream or download video 26% 45% 67% 100% Upload video content (for example, via Vine, YouTube or Facebook) 19% 31% 48% 45% Shop and find deals 28% 37% 57% 57% Check employment opportunities 11% 17% 23% 22% Take online classes/help kids with school 8% 15% 19% 15% Get health information/use health and wellness tools 17% 23% 38% 37% Manage or monitor home security/energy use 6% 7% 13% 12% Connect to government agencies/resources 6% 8% 15% 15% 3

4 MOBILE USAGE IS EXPECTED TO CONTINUE TO GROW FOR MOST RESPONDENTS. Overall 62% of respondents expect to use their mobile devices more in the future. 74% of and 82% of respondents who stream/download music or videos weekly expect to use their mobile devices more in the future. Bank/manage finances (24%) and shop and find deals (21%) topped the list of more advanced mobile usage that consumers plan to do more of in the future. Q.1b In which of the following do you think you will likely use your mobile devices MORE in the future? Any (Net) 62% 74% 82% 82% Send texts 38% 46% 49% 51% Surf the Internet 33% 42% 46% 51% Bank/manage finances 24% 31% 42% 42% Download and use apps 23% 24% 33% 36% Get news alerts/read news 22% 24% 32% 39% Shop and find deals 21% 23% 37% 33% Play games 20% 22% 29% 33% Participate on a social network 19% 27% 32% 33% Stream or download music 17% 21% 36% 35% Stream or download video 12% 14% 26% 31% Get health information/use health and wellness tools 11% 10% 17% 18% Upload video content (for example via Vine YouTube or Facebook) 10% 12% 24% 23% Manage or monitor home security/energy use 7% 7% 14% 14% Check employment opportunities 7% 11% 14% 14% Take online classes/help kids with school 6% 10% 13% 14% Connect to government agencies/resources 6% 5% 12% 13% Other: Plan to use more for another activity 3% 2% 4% 4% Don't plan to use more in the future 36% 25% 18% 17% Refused 1% 1% 0 0 4

5 MOST CONSUMERS FEEL THAT NEW BUSINESS MODELS COULD BENEFIT CONSUMERS. 64% felt that at least one of the tested business models would benefit consumers. An additional 8% expressed interest in other business models. Thus, a total of 72% overall expressed an openness to new business models. were more receptive to new business models, with 79% picking one or more model or potential other models as benefiting consumers. Respondents who regularly stream/download music or videos were also more likely to think these kinds of business models are beneficial, 90% and 88% respectively. Only 25% felt that these types of business would not benefit consumers. Q.2 Many companies are exploring new business models and service offerings for wireless. Which of the following do you feel would benefit consumers? Any (Net) 64% 71% 84% 83% A wireless company allows its customers to stream unlimited music from specific websites free of data charges 36% 40% 53% 47% Consumers can stream video to their mobile device without incurring data charges in exchange for viewing advertising 29% 33% 41% 43% Consumers get free wireless service in exchange for having ads delivered to their mobile device that are relevant to their interests (similar to Google search ads) 29% 29% 39% 40% Content companies like Netflix or ESPN pay for your mobile data usage when watching a game or movie on their website 27% 32% 42% 40% A $12 a month wireless plan that offers voice texting and access to Facebook 24% 23% 28% 28% A major advertiser sponsors free inflight Wi-Fi but only to access certain websites like Facebook or Amazon. You can still purchase full Internet access 18% 24% 27% 26% None of the above but I would be interested in other new business models 8% 8% 6% 5% I do not think these types of new business models would benefit consumers 25% 19% 8% 11% Refused 3% 2% 0 0 Don't know/no response 1% 0 1% 1% 5

6 MOST CONSUMERS DO NOT THINK THE GOVERNMENT SHOULD BLOCK OR BE INVOLVED IN APPROVING NEW BUSINESS MODELS. 88% felt that the government should not block or be involved in approving new business models. More than half (56%) felt the government should not be involved in approving new business models. Another 32% felt the government should not block new choices for consumers or business models for companies that could save consumers money and/or better meet their needs. Only 10% felt the government should block these models. Q.3 Which of the following points of view is closest to your own opinion? The government should not block new choices for consumers or business models for companies that could save consumers money and/or better meet their needs 32% 36% 40% 36% The government should block these kinds of consumer choices and business models because they unfairly favor well-funded companies over smaller start-ups 10% 15% 13% 13% The government should not be involved in approving new business models for companies 56% 47% 47% 50% Refused 2% 3% 1% 1% 6

7 THE SAME LEVEL OR LESS OF REGULATION WAS PERCEIVED AS THE BEST APPROACH TO SPEED THE ARRIVAL OF NEW MOBILE PRODUCTS, APPS AND SERVICE CHOICES. 90% felt the same level or less of regulation would be the best approach to speed the arrival of new mobile products, apps and service choices. 54% felt the same regulation would be best and 36% felt that less regulation would be best. Only 8% felt more regulation would be the best approach to speed the arrival of new mobile products, apps and service choices. perceptions were overall supportive of the same or less regulation at 86%. Respondents who streamed/downloaded music or video were also supportive of less or the same level of regulation at 91% and 90% respectively. Q.4 What is the best approach for speeding the arrival of new mobile products, apps, and service choices? - Less Regulation 36% 32% 37% 43% More Regulation 8% 12% 9% 10% Keep it the same as today 54% 54% 54% 47% Refused 2% 2% - - 7

8 WIRELESS HABITS REFLECT CONSUMER UNDERSTANDING OF WIRED/WIRELESS NETWORK DIFFERENCES. Only 10% of respondents felt their wireless and wired broadband habits are similar. 27% wait to connect to Wi-Fi or plug into their computer to download a large app or file on their mobile device to avoid using their wireless data plan. 19% stream on a computer rather than a mobile device to avoid using too much wireless data or experiencing loading delays. 44% said they do not usually stream or download large files. 8% said they did not have a wired broadband connection. and streamers/downloaders of music or video, all likely heavier users of data, were more likely to alter their wireless (versus wired) behavior. o 38% of wait to download a large file and 33% stream movies and TV on their computers to avoid using wireless data. o 50% of those who regularly stream/download music wait to download a large file and 33% stream movies and TV on their computers to avoid using wireless data. o 47% of those who regularly stream/download video wait to download and 36% stream movies and TV on their computers to avoid using wireless data. Q.5 Thinking about your Internet habits on your mobile device as compared to your computer, please indicate which of the following best applies to you? DAILY/WEEK LY Any (Net) 36% 54% 63% 62% To download a large app or file to my mobile device I often wait until I am on a Wi-Fi network or plugged into my computer to avoid using my wireless data plan 27% 38% 50% 47% I tend to stream movies and TV shows via my computer rather than my mobile device to avoid using too much data and/or experiencing loading delays 19% 33% 33% 36% Neither: My wireless and wired broadband habits are similar 10% 16% 19% 17% Neither: I don t have a wired broadband connection (such as cable, DSL, FiOS, UVerse) 8% 5% 4% 3% Neither: I don t usually stream or download big files 44% 23% 14% 16% Refused 3% 3% 1% 1% 8

9 SMARTPHONES PREVAIL, BUT BASIC PHONE USE REMAINS SIGNIFICANT 66% of respondents used a smartphone and 35% use a basic phone. 36% use a tablet/ipad regularly. Smartphone usage jumped to 83% for and 92% for regular music and 89% for regular video streamers/downloaders, respectively. Q.6 How many wireless devices (tablets and phones) do you personally use on a regular basis? Millennial Any (Net) 98% 98% 99% 99% I use a smartphone 66% 83% 92% 89% I use a tablet/ipad 36% 39% 49% 50% I use a basic phone 35% 15% 12% 14% I use more than one cellphone 5% 5% 2% 3% Refused 2% 2% 1% 1% METHODOLOGY: The study was conducted online using the GfK KnowledgePanel, an online probability-based panel designed to be representative of the U.S. general population, not just the online population. The study consisted of 865 interviews conducted between Oct. 17 and Oct. 19, 2014 among adults aged 18+ who are wireless consumers. The margin of error is +/-3 percentage points. ABOUT THE STUDY ORGANIZATIONS: About Mobile Future Mobile Future is an association of cutting-edge technology and communications companies and a diverse group of non-profit organizations, working to support an environment that encourages investment and innovation in the dynamic wireless sector. About Social Lens Research Social Lens Research makes research a more social experience. Social Lens creates engaging research experiences that are social and mobile to help companies better understand and engage hard-to-reach audiences. The experienced team of Fortune 100 marketers and researchers specialize in helping organizations understand how mobile and social media adoption impacts their target audiences. The firm is based in Washington D.C. About the GfK Group The GfK Group offers the fundamental knowledge that industry, retailers, services companies and the media need to make market decisions. It delivers a comprehensive range of information and consultancy services in the three business sectors Custom Research, Retail and Technology and Media. GfK, one of the leading market research organizations worldwide, operates in more than 100 countries and employs over 11,000 staff. 9

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