Over a third (38%) of consumers value the ‘collective’ benefits of their home broadband the most, according to a new report commissioned by Liberty Global from consultants A.T. Kearney.
These benefits include coverage network quality and innovation and were followed by ‘individual’ benefits, such as speed and bundle size, which were highlighted by 33% of respondents. At the same time, price was ranked at the most important factor by just 16% of people and flexibility by 13%.
The report, entitled Viewed through the Lens of the Consumer: Value Creation in the Telecommunications Sector, surveyed 8,000 people in eight European countries – the UK Switzerland, Poland, Ireland, France, Germany and the Netherlands.
Commenting on its findings, Manuel Kohnstamm, chief corporate affairs officer of Liberty Global, said: “We’ve commissioned this research to shine a light on what consumers think is important about their broadband and WiFi services. In particular, the report’s key finding that price is lower down the list of priorities for consumers suggests that regulators would do well to find policies that successfully balance all prevailing factors valued by broadband users – including coverage, network quality and innovation – rather than narrowly focusing on the pricing of such services.”
Delving further into the link between price and investment in high-quality home broadband services, the report concludes that there is a positive relationship between price levels, investment and benefits delivered to society. It identifies a virtuous circle where positive revenue developments through price create headroom for investment, which in turn impacts on further revenue generation. This is supported by the fact that the top 10 EU countries in terms of relative price levels outperform the bottom 10 across all proxies for benefits to society – including online education, shopping, e-government services, cloud computing and big data analytics – used for the study.
In other findings, the study reveals that access to home broadband & WiFi scores either first, or is in joint first place, in six out of eight European countries surveyed when ranked against such things as holidays, chocolate, a favourite TV channel and even sex. In only two countries – Switzerland and Poland – did home broadband & WiFi access not make the top spot.
The report also looks more broadly at the value attached to broadband by consumers across the generations, finding that broadband & WiFi is considered especially valuable to the youngest generation of respondents (aged 18 – 29) who would, on average, require compensation of €32,500 (around £28,500) to forgo access for one year – four times what the amount required by those aged between 50 & 65.
Hans Boezel, principal, communications, media & technology practice, AT Kearney, added: “We fully appreciate that capturing the ‘real’ opinion of customers is always challenging. However, by focusing on understanding and appreciating the order of magnitude of various findings, this report already provides sufficient guidance for informed debate and decision-making around what is really of importance to a consumer. This not just in the limited time they are in a ‘purchasing mode’, but also when they are actually using the service itself, which they are most of the time.”