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Sunday, 21 May 2023 15:25

Cost-conscious consumers willing to pay for more telco services, says survey Featured

Specific customer segments in broadband and mobile are still willing to pay more despite current conditions, according to research by management consulting company Oliver Wyman.

“Despite current economic challenges, the telecommunications industry in Australia can still realise growth through six key opportunities,” commented Oliver Wyman partner and head of communications, media, and technology practice Asia Pacific Felix Iblher.

“The findings show only 32% of Australians are likely to switch their fixed broadband and mobile provider in the next 12 months, which is lower than their European peers by 10%”, said Iblher.

“Among those planning to switch broadband, 49% Australian broadband users prioritise price, which is slightly less important than for the average European. However, 24% of Australian customers prioritise reliability and 17% speed when switching providers and are willing to pay more for those features,” said Iblher.

Consumer spending is declining, as evidenced by the stagnant number of connected devices across countries among others. In Australia, the average number of household devices remains unchanged, while the UK and Spain have the highest average number but have experienced the greatest declines, the report stated.

“While price remains a key factor for Australian broadband users, reliability and speed are becoming more important considerations in their decision-making process. Nearly half of them plan to upgrade their broadband speed within the next 12 months, and 64% are willing to pay more for faster speeds,” said Oliver Wyman partner Zia Bhadiar.

“Telco operators can proactively target customers who have broadband with speeds up to 50Mbps and over 100Mbps, as they are twice as likely to pay up to 20% more,” said Bhadiar.

Although there are two customer segments who are interested in upgrading their broadband speed, 34% of customers are unsure of their current broadband speed, which may present an opportunity for customer education.

This group is also the least active. Only 30% of them are planning to upgrade their broadband speed, indicating the need for more awareness and information about the benefits of upgrading.

Mobile customers exhibit a similar dynamic to broadband customers. Although the net satisfaction of mobile services is at 24%, only 30% of Australians are likely to switch their mobile service provider in the next 12 months, which is 14% less than the European average.

“Within Australia, we see consistency in consumer preferences across broadband and mobile. 87% of customers that prioritise price for broadband also prioritise price for mobile,” said Bhadiar.

“When switching mobile providers, price is the primary purchasing criteria for 56% of customers but in comparison to Europe, Australians are less price sensitive. In comparison, customers prioritising price can be as high as 71% as seen in France. Service quality, which includes network performance, data allowance, and regional coverage, is more important to Australians than to their European peers,” said Iblher.

Oliver Wyman’s annual global Telco Consumer Survey provides insights into changes in consumer preferences. It surveyed more than 7,000 respondents in six countries, including 1013 Australian respondents across states, metro and regional areas, and age groups.

This first appeared in the subscription newsletter CommsWire on 19 May 2023.

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