Europeans Will Ditch Landlines for Lower Cost, Better Coverage
By Eric Lin, Wed Sep 22 23:15:00 GMT 2004

A new study supports anecdotal evidence that lower prices and better coverage, not more advanced features, will convince subscribers to use their mobiles more often.

Capgemini surveyed over 1200 subscribers on 27 networks in Europe to find out what it would take for them to use their mobile even more. It's no surprise that price was the biggest issue, with coverage running a very close second. Although 44 percent of users said they would give up advanced services like picture messaging or content portals if they could get cheaper basic services, many surveyed were still interested in advanced features -- however they are different features than the ones carriers are touting.

A little over half those surveyed are unhappy with how much they paid for calls. If carriers were able to lower prices, 79 percent of those surveyed said they would increase mobile usage and decrease reliance on landlines. Half said they would be willing to ditch a fixed line altogether if the price was right. Better signal coverage was almost as important as price. 74 percent of those surveyed said it would increase their mobile phone usage. An even bigger shock was that 79 percent said they would use their mobiles in cars more often if carriers offered subsidized hands-free kits.

Very few markets in Europe, with the exception of Denmark, have been competitive enough to offer the prices low enough to increase usage or replace landlines. Yankee Group analyst Matthew Hatton notes that this increased competition has stalled deployment of advanced services like 3G networks. But Capgemini report author Jawad Shaikh told the BBC, "Using 3G may be high on the agenda for many operators but it has little relevance in the eyes of consumers."

Plenty of anecdotal evidence and market research (There's a reason AT&T Wireless has a new "How many bars do you have?" slogan.) supports the theory that price and coverage matter most. However networks cannot get so caught up in any one aspect of network building that they ignore the rest. Focusing on price and coverage in the near term will build a strong user base. However there is mounting evidence that handsets are becoming mobile computing platforms. If networks ignore growing data and content needs of these users further down the line, they will eventually suffer. Networks can't just drop their 3G plans, they merely have to re-prioritize them. If customers really will drop their landlines given cheap ubiquitous mobile coverage, 3G will become even more critical than operators say it is now.