U.S. Consumers: Perceptions of Carriers and Services

Transcription

1 and present: U.S. Consumers: Perceptions of Carriers and Services White Paper Published Second Quarter, 2013 Version 1.0 igr W. Hwy 71 Suite 350 PMB 341 Austin TX 78738

2 Table of Contents Executive Summary... 1 Figure A: Primary Wireless Carrier Net Promoter Score, U.S. Consumers... 2 Figure B: Top Factors Considered in Likelihood of Carrier Recommendation, U.S. Consumers... 3 Methodology... 6 igr End User Quantitative and Qualitative Studies...6 Wireless Carrier Experience... 8 Table 1: Primary Wireless Carrier... 8 Figure 1: Primary Wireless Carrier... 9 Wireless Carrier Net Promoter Score Table 2: Likelihood to Recommend Wireless Carrier, U.S. Consumers Figure 2: Likelihood to Recommend Wireless Carrier, U.S. Consumers Table 3: Primary Wireless Carrier Net Promoter Score, U.S. Consumers Figure 3: Primary Wireless Carrier Net Promoter Score, U.S. Consumers Factors Considered in Wireless Carrier Net Promoter Score Table 4: Top Factors Considered in Likelihood of Carrier Recommendation, U.S. Consumers Figure 4: Top Factors Considered in Likelihood of Carrier Recommendation, U.S. Consumers The Increasing Importance of the Data Network Table 5: Top Five Factors Considered in 2012 and 2013, U.S. Consumers Figure 5: Top Five Factors Considered in 2012 and 2013, U.S. Consumers Table 6: Top Factors Considered, U.S. Consumers Under the Age of Figure 6: Top Factors Considered, U.S. Consumers Under the Age of Wireless Service Experience In-Home Voice Reception Table 7: Perceived Quality of In-Home Voice Reception, U.S. Consumers Figure 7: Perceived Quality of In-Home Voice Reception, U.S. Consumers Factors Considered in In-Home Voice Reception Table 8: Factors Considered in In-Home Voice Reception, U.S. Consumers Figure 8: Factors Considered in In-Home Voice Reception, U.S. Consumers In-Home Data Reception Table 9: Perceived Quality of In-Home Data Reception, U.S. Consumers Figure 9: Perceived Quality of In-Home Data Reception, U.S. Consumers Definitions General Device Types Services Network Technology Quoting information from an igillottresearch publication: external any igillottresearch information that is to be used in press releases, sales presentations, marketing materials, advertising, or promotional materials requires prior written approval from igillottresearch. igillottresearch reserves the right to deny approval of external usage for any reason. Internal-quoting individual sentences and paragraphs for use in your company s internal communications activities does not require permission from igillottresearch. The use of large portions or the reproduction of any igillottresearch document in its entirety does require prior written approval and may have some financial implications. Copyright 2013 igillottresearch, Inc. Reproduction is forbidden unless authorized. FOR INFORMATION PLEASE CONTACT IAIN GILLOTT (512)

3 About igr Disclaimer Quoting information from an igillottresearch publication: external any igillottresearch information that is to be used in press releases, sales presentations, marketing materials, advertising, or promotional materials requires prior written approval from igillottresearch. igillottresearch reserves the right to deny approval of external usage for any reason. Internal-quoting individual sentences and paragraphs for use in your company s internal communications activities does not require permission from igillottresearch. The use of large portions or the reproduction of any igillottresearch document in its entirety does require prior written approval and may have some financial implications. Copyright 2013 igillottresearch, Inc. Reproduction is forbidden unless authorized. FOR INFORMATION PLEASE CONTACT IAIN GILLOTT (512)

4 Executive Summary igr s most recent U.S. consumer survey questioned over 1,000 wireless subscribers about their current use of mobile phones and wireless technologies, and specifically inquired about their service provider, their wireless data and voice service experience, and what improvements they would like to see in their wireless service. In this survey, igr used a net promoter score as a way to rate the wireless service providers. A net promoter score is determined by asking one simple question, How likely is it that you would recommend Company X to a friend or colleague? Depending on the likelihood, which is on a scale of zero to 10, the customers of a company, in this case the subscribers of a wireless service provider, can then be divided into three categories: promoters, passives, and detractors. The promoters are loyal enthusiasts, the passives are satisfied but unenthusiastic, and the detractors are unhappy customers. First, igr asked respondents how likely they are to recommend their primary service provider to a friend or colleague. Zero indicated not at all likely, and 10 indicated extremely likely. Those respondents that gave the company a score of nine or 10 are classified as promoters. Those with a score of seven or eight are passives, and those who quantified their likelihood as zero to six are detractors. igr then calculated the Net Promoter Score by subtracting the percentage of detractors from the percentage of promoters. Passives are thus ignored. The Net Promoter Score of each major service provider is shown Figure A. As shown, Verizon Wireless had the highest Net Promoter Score, followed by T- Mobile, AT&T Wireless, and finally Sprint. 1

5 Figure A: Primary Wireless Carrier Net Promoter Score, U.S. Consumers AT&T Verizon Wireless Sprint Nextel T-Mobile When the survey respondents were asked to identify the factors that they considered when they rated their service provider, igr found that cost of service and voice network quality are the factors consumers consider most often (Figure B). However, igr also discovered that the quality and speed of the data service is rapidly becoming as important as the quality of the voice service. The number of U.S. consumers who considered the speed of the data service when rating their wireless service provider increased 29 percent from September 2012 to March Note that in-home data reception quality appeared directly related to the likelihood to recommend the carrier. Promoters, those respondents who gave a likelihood of nine or 10 to recommend their carrier, were significantly more likely to report excellent or very good in-home data reception. 2

6 Figure B: Top Factors Considered in Likelihood of Carrier Recommendation, U.S. Consumers None of these Billing -- paper Other Web site -- sales, service, etc. Sales staff (in store) Billing -- automatic / via Web Device selection / choice Speed of data network Customer service Quality of data network Quality of voice network Cost of service (voice/data/text) 0% 10% 20% 30% 40% 50% 60% Some of our other key findings include: When asked to indicate their primary wireless service provider, most respondents (34 percent) identified Verizon Wireless, followed by AT&T Wireless, T-Mobile USA, and Sprint Nextel. In total eight service providers were identified by name, and 12 percent of subscribers indicated having other provider. The popularity of smartphones continues for subscribers of most service providers. Subscribers of US Cellular, Cricket, and Other service providers were more likely to report owning a basic mobile phone, while subscribers of all other carriers were more likely to report owning a smartphone. Subscribers at Sprint Nextel and T-Mobile are more likely to use an Android smartphone, while subscribers at AT&T and Verizon are more likely to use an Apple ios smartphone. Verizon Wireless had the highest Net Promoter Score, followed by T-Mobile, AT&T Wireless, and finally Sprint. Regardless of the service provider, other trends were noted with regard to the Net Promoter Score: 3

7 o o o o o o Users with an unlimited data plan were much more likely than users with a limited data plan to be promoters (by responding with a likelihood to recommend of nine or 10.) Subscribers who use their mobile phone for personal use only were more likely than subscribers who use their mobile phone for both work and personal use to be promoters. Android smartphone users were more likely than Apple ios smartphone users to be promoters. Females were more likely than males to be promoters. Respondents aged were more likely than other age groups to be promoters. Married respondents were more likely than single respondents to be promoters. The most selected factor that U.S. consumers consider when deciding the likelihood of recommending their current wireless carrier is cost of service (50.2 percent), followed by quality of voice network (45.8 percent), and quality of data network (35.0 percent). o o Verizon Wireless subscribers were significantly more likely than subscribers of the other three major providers to consider quality of voice network. Apple ios users were significantly more likely than Android users to consider the quality of the data network and the speed of the data network. When igr compared the top five factors considered in rating one s carrier with the results from our September 2012 consumer survey, we found that the most obvious change was the significant increase in two categories related to data service: quality of data network (20.7 percent increase) and speed of data network (28.7 percent increase). The majority of respondents (71.4 percent) indicated that their in-home voice reception was excellent or very good. Furthermore, only a very small group of respondents (1.2 percent) replied that they do not use their cell phone inside their home. Strength of the signal ( number of bars on your phone) was the most reported indicator of in-home voice reception (63.6 percent), followed by voice clarity (55.0 percent) and number of dropped calls (25.8 percent). These results changed very little from a comparable survey in The majority of respondents (69.5 percent) indicated that their in-home data reception was excellent or very good. A small number of respondents 4

8 (3 percent) were aware that they never use mobile data, but are instead using their home WiFi network. 5

9 Methodology The data presented herein are the results of igr s survey of 1,058 U.S. consumers in March 2013 with respect to wireless services and mobile device use. In order to participate in the survey respondents were required to: Be between years of age. Own and use a mobile phone. Further detail on the characteristics of the respondents can be found in the Survey Demographics section of this report. Other information presented in this report originates from igr s other primary and secondary research. Definitions of industry terminology can be found in the Definitions section towards the end of this report. igr End User Quantitative and Qualitative Studies igr regularly designs and implements primary research. For our own research needs alone, we survey U.S. consumers each quarter. igr surveys a randomly selected, representative sample of U.S. end users using a census-based framework. Survey results are weighted and balanced to coincide with the U.S. Census Bureau s 2011 American Community Survey, which provides demographic estimates (e.g., age, ethnicity, and household income, etc.) for the U.S. population. We continually monitor our surveys for accuracy and update them as new population information becomes available. We routinely include specialized questions at specific target markets to continually meet our clients needs and to provide current information and market trends. When it comes to custom projects, examples of what we can provide are: Domestic survey projects across most U.S. target demographics with detail down to the ZIP code, if required. International end user survey projects. To date, we have conducted primary research in China, Brazil, Europe, India, Indonesia, Japan, Mexico and Canada. Focus groups to assess end user reaction to current and future product. igr creates, codes, tests, deploys and fields surveys via a licensed, Web-based tool. We also maintain extremely close relationships with several major, highquality panel companies. 6

10 As a result, once a client has approved the final survey we can field it within hours. Typically, our U.S. end user surveys complete in two days. Upon survey completion, we can send raw data to the client immediately. The in-depth analysis takes longer, but every client will receive the raw data, cross-tabs and a thorough report summarizing and detailing the results and our findings. Please contact Iain Gillott, president of igr at (512) or by at iain@igr-inc.com for more details. 7

11 Wireless Carrier Experience igr surveyed respondents on their current wireless service experiences. When asked to indicate their primary wireless service provider, most respondents (34.0 percent) selected Verizon Wireless, followed by AT&T Wireless, T-Mobile USA, and Sprint Nextel (Table 1; Figure 1). Note that this survey was not designed to assess overall U.S. market share of each of the wireless carriers. Table 1: Primary Wireless Carrier Carrier Percent AT&T Wireless 25.6% Verizon Wireless 34.0% Sprint Nextel 9.5% T-Mobile USA 11.6% U.S. Cellular 1.9% Cricket 1.3% MetroPCS 2.3% Boost Mobile 1.4% Other 12.4% 8

12 Figure 1: Primary Wireless Carrier 1% 2% 1% 2% 12% 10% 12% 34% 26% AT&T Wireless Verizon Wireless Sprint Nextel T-Mobile USA US Cellular Cricket MetroPCS Boost Mobile Other The following demographic trends were also noted when the results were analyzed according to demographic variables and use of wireless services. Subscribers of US Cellular, Cricket, and Other service providers were more likely to report owning a basic mobile phone, while subscribers of all other carriers were more likely to report owning a smartphone. AT&T Wireless users were much more likely than subscribers of other service providers to use their mobile phone for both work and personal use. AT&T subscribers surveyed were much more likely to be male, while T- Mobile subscribers were more likely to be female. Verizon and Sprint were evenly split. T-Mobile subscribers were more likely to be under 44 years of age. Subscribers at Sprint Nextel and T-Mobile are more likely to use an Android smartphone, while subscribers at AT&T and Verizon are more likely to use an Apple ios smartphone. Subscribers who live in urban areas are more likely to have AT&T or T- Mobile as their service provider. Suburban subscribers are more likely to use Sprint Nextel, and rural subscribers are more likely to be Verizon Wireless subscribers. 9

13 Subscribers were asked to identify the region of the United States in which they live. The following trends emerged: o o o o Subscribers in the Northeast were more likely to have Verizon Wireless or T-Mobile as their service provider. Subscribers in the Midwest were not significantly more likely to use one provider over another. Subscribers in the South were significantly more likely to use Sprint Nextel and slightly more likely to use AT&T Wireless. Subscribers in the West were slightly more likely to use AT&T or Sprint. Single respondents were more likely to use AT&T Wireless and T-Mobile, while married respondents were more likely to use Verizon Wireless. T-Mobile respondents were the most likely to have children living in their home. Wireless Carrier Net Promoter Score The net promoter score is a way to rate a company s performance, according to the company s customers likelihood to recommend it. The customers of a company, in this case the subscribers of a wireless service provider, can be divided into three categories: promoters, passives, and detractors. The promoters are loyal enthusiasts, the passives are satisfied but unenthusiastic, and the detractors are unhappy customers. First, igr asked respondents how likely they are to recommend their primary service provider to a friend or colleague. Zero indicated not at all likely, and 10 indicated extremely likely. Their responses, according to their primary service provider, are shown in Table 2 and Figure 2. Table 2: Likelihood to Recommend Wireless Carrier, U.S. Consumers Likelihood to Recommend AT&T Wireless Verizon Wireless Sprint Nextel T-Mobile USA 0 1.5% 0.6% 2.9% 0.8% 1 0.7% 0.6% 2.0% 0.8% 2 0.7% 0.6% 3.9% 4.1% 3 0.4% 1.1% 4.9% 3.3% 10

14 Likelihood to Recommend AT&T Wireless Verizon Wireless Sprint Nextel T-Mobile USA 4 3.3% 1.9% 2.0% 1.6% 5 7.8% 5.6% 6.9% 2.4% 6 8.5% 4.4% 8.8% 6.5% % 11.7% 8.8% 7.3% % 22.8% 20.6% 25.2% % 25.0% 15.7% 22.8% % 25.8% 23.5% 25.2% Figure 2: Likelihood to Recommend Wireless Carrier, U.S. Consumers 30% 25% 20% 15% 10% 5% % AT&T Wireless Verizon Wireless Sprint Nextel T-Mobile USA 11

15 Those respondents that gave the company a score of nine or 10 are classified as promoters. Those with a score of seven or eight are passives, and those who quantified their likelihood as zero to six are detractors. igr then calculated the Net Promoter Score by subtracting the percentage of detractors from the percentage of promoters. Passives are thus ignored. The Net Promoter Score of each major service provider is shown in Table 3 and Figure 3. Verizon Wireless had the highest NPS, followed by T-Mobile, AT&T Wireless, and finally Sprint. Table 3: Primary Wireless Carrier Net Promoter Score, U.S. Consumers Carrier NPS AT&T Wireless 19 Verizon Wireless 36 Sprint Nextel 8 T-Mobile 28 Figure 3: Primary Wireless Carrier Net Promoter Score, U.S. Consumers AT&T Verizon Wireless Sprint Nextel T-Mobile 12

16 igr also found the following trends relative to how likely respondents were to recommend their carriers: Users with an unlimited data plan were much more likely than users with a limited data plan to be promoters (by responding with a likelihood to recommend of nine or 10.) Subscribers who use their mobile phone for personal use only were more likely than subscribers who use their mobile phone for both work and personal use to be promoters. Android smartphone users were more likely than Apple ios smartphone users to be promoters. Females were more likely than males to be promoters. Respondents aged were more likely than other age groups to be promoters. Married respondents were more likely than single respondents to be promoters. Factors Considered in Wireless Carrier Net Promoter Score Respondents were asked to indicate the top three factors that they considered when deciding the likelihood of recommending their current wireless carrier. The most selected factor was cost of service (50.2 percent), followed by quality of voice network (45.8 percent), and quality of data network (35.0 percent), as shown in Table 4 and Figure 4 Table 4: Top Factors Considered in Likelihood of Carrier Recommendation, U.S. Consumers Percent Cost of service (voice/data/text) 50.2% Quality of voice network 45.8% Quality of data network 35.0% Customer service 34.7% Speed of data network 32.3% Device selection / choice 23.7% Billing - automatic / via Web 14.1% 13

17 Percent Sales staff (in store) 12.1% Web site - sales, service, etc. 10.0% Other 8.0% Billing - paper 8.0% None of these 1.8% Figure 4: Top Factors Considered in Likelihood of Carrier Recommendation, U.S. Consumers None of these Billing -- paper Other Web site -- sales, service, etc. Sales staff (in store) Billing -- automatic / via Web Device selection / choice Speed of data network Customer service Quality of data network Quality of voice network Cost of service (voice/data/text) 0% 10% 20% 30% 40% 50% 60% 14

18 When igr analyzed the factors considered in determining the likelihood to recommend one s carrier, the following trends emerged: Those respondents who gave a 10 for the likelihood to recommend were significantly more likely than other respondents to list customer service, sales staff in store, paper billing, and web billing as one of the top three factors they considered. Those respondents who gave a 9 for the likelihood to recommend were significantly more likely than other respondents to list quality of data network as one of the top three factors they considered. T-Mobile subscribers were less likely than subscribers of the other three major providers to consider speed of data network. T-Mobile subscribers were more likely than subscribers of the other three major providers to consider device selection. Verizon Wireless subscribers were significantly more likely than subscribers of the other three major providers to consider quality of voice network. AT&T Wireless subscribers were more likely than subscribers of the other three major providers to consider customer service. Sprint Nextel subscribers were less likely than subscribers of the other three major providers to consider customer service. Subscribers who use their mobile phone for both work and personal use are more likely than those that use their phone for only personal use to consider many qualities, including the following: sales staff in store, web site, paper billing, web billing, quality of data network, speed of data network. Basic phone users were more likely than smartphone users to consider customer service, cost of service, and quality of voice network. Smartphone users were more likely than basic phone users to consider the web site and billing (both paper and web-based). Not surprisingly, smartphone users were also more likely to consider the quality of the data network, and the speed of the data network. Apple ios users are significantly more likely than Android users to consider the quality of the data network and the speed of the data network. Android users are significantly more likely than Apple ios users to consider cost of service, sales staff in store, web site, and automatic billing via the Web. Subscribers with LG phones are more likely than Samsung or Apple owners to consider the quality of the voice network. 15

19 Subscribers with Apple phones are much more likely than Samsung or LG owners to consider the quality and speed of the data network. Subscribers without a data plan are more likely than those with a data plan to consider cost of service and the quality of the voice network. Those subscribers with an unlimited data plan are more likely than those with a limited data plan to consider the quality and speed of the data network. Females are much more likely than males to consider customer service and the sales staff in the store, while males are more likely than females to consider the website, paper billing, and the quality of the voice network year olds are significantly more likely than other age groups to consider the sales staff in a store. Respondents 55 years old and older are more likely to consider the quality of the voice network, while year olds are more likely to consider the quality and speed of the data network. Single respondents are more likely than married respondents to consider paper billing and the web site. Those respondents that reside in the South are the most likely to consider customer service and the least likely to consider cost of service, when compared to subscribers in other regions. Those respondents that reside in the Midwest are more likely than subscribers in other regions to consider automatic billing. The Increasing Importance of the Data Network igr also compared the top five factors considered in determining the likelihood to recommend one s carrier with the results from our September 2012 consumer survey. Table 5 and Figure 5 below show that the most obvious change was the significant increase in two categories related to data service: quality of data network and speed of data network. As more consumers continue to rely on their smartphones, their data service has become more important in determining their satisfaction with their carrier. Table 5: Top Five Factors Considered in 2012 and 2013, U.S. Consumers Fall 2012 Spring 2013 Change Cost of service (voice/data/text) 53.7% 50.2% 6.5% decrease Quality of voice network 50.3% 45.8% 8.9% decrease 16

20 Customer service 32.3% 34.7% 7.4% increase Quality of data network 29.0% 35.0% 20.7% increase Speed of data network 25.1% 32.3% 28.7% increase Figure 5: Top Five Factors Considered in 2012 and 2013, U.S. Consumers 60% 50% Fall 2012 Spring % 30% 20% 10% 0% Cost of service (voice/data/text) Quality of voice network Customer service Quality of data network Speed of data network Furthermore, as mentioned above, year olds are more likely than older respondents to consider the quality and speed of the data network. When igr only considered these younger subscribers responses, quality of data network and speed of data network were considered almost as often as quality of voice network (Table 6, Figure 6). 17

21 Table 6: Top Factors Considered, U.S. Consumers Under the Age of 45 Percent Cost of service (voice/data/text) 48.8% Quality of voice network 42.8% Speed of data network 40.9% Quality of data network 38.9% Customer service 33.4% Device selection / choice 23.5% Sales staff (in store) 13.7% Billing -- automatic / via Web 13.7% Web site -- sales, service, etc. 12.0% Billing -- paper 9.6% Other 5.3% None of these 1.9% 18

22 Figure 6: Top Factors Considered, U.S. Consumers Under the Age of 45 None of these Other Billing -- paper Web site -- sales, service, etc. Billing -- automatic / via Web Sales staff (in store) Device selection / choice Customer service Quality of data network Speed of data network Quality of voice network Cost of service (voice/data/text) 0% 10% 20% 30% 40% 50% 60% 19

23 Wireless Service Experience As discussed above, quality of voice network and quality of data network are two of the factors users consider when evaluating wireless service providers. Therefore, igr asked respondents to describe the quality of each of these services while at home. In-Home Voice Reception igr asked respondents to describe the quality of their in-home voice reception. As seen in Table 7 and Figure 7, the majority of respondents (71.4 percent) indicated that their in-home voice reception was excellent or very good. Only a very small group of respondents (1.2 percent) replied that they do not use their cell phone inside their home. Table 7: Perceived Quality of In-Home Voice Reception, U.S. Consumers Rating Percent Excellent 36.4% Very Good 35.0% Good 19.8% Poor 5.6% Terrible 2.0% I don t typically use my cell phone inside my home 1.2% 20

24 Figure 7: Perceived Quality of In-Home Voice Reception, U.S. Consumers 40% 35% 30% 25% 20% 15% 10% 5% 0% Excellent Very Good Good Poor Terrible I don't typically use my cell phone inside my home The following trends were also noted when the ratings of in-home voice reception were analyzed. In-home voice reception quality appeared directly related to the likelihood to recommend the carrier. Promoters, those respondents who gave a likelihood of nine or 10 to recommend their carrier, were significantly more likely to report excellent or very good in-home voice reception. Similarly, detractors, those respondents who gave a likelihood of 0-6 to recommend their carrier, were significantly more likely to report good, poor, or terrible in-home voice reception. Respondents who use their phone for personal use were more likely than those who use their phone for both work and personal use to rate their inhome voice reception as very good. Conversely, those who use their phone for both work and personal use were more likely to rate their in-home voice reception as good. The two groups were equally likely to give an excellent rating. Smartphone users were more likely to rate their in-home voice reception as excellent while basic phone users were more likely to rate their in-home voice reception as very good or good. 21

25 Respondents with AT&T Wireless and Verizon Wireless were more likely than T-Mobile subscribers, who were more likely than Sprint subscribers, to rate their in-home voice reception as excellent. Apple ios smartphone users were more likely than Android users to rate their in-home voice service as excellent, while Android device users were more likely than ios users to rate such service as very good. iphone users were more likely than users of other brands of devices to rate their in-home voice service as excellent, while Motorola, Samsung and LG users were more likely than iphone users to rate their service as very good. Married respondents were more likely than single respondents to give an excellent rating to their in-home voice reception. Males and females were equally likely to rate their in-home voice reception as excellent or very good. However, males were more likely than females to give a good rating, and females were more likely than males to give a poor rating. Respondents with children aged zero to 14 years were significantly more likely than those without children or those with children aged years to rate their in-home reception as excellent. Factors Considered in In-Home Voice Reception When asked to report what they considered in assessing their in-home voice reception, strength of the signal ( number of bars on your phone) was the most reported indicator of in-home voice reception (63.6 percent), followed by voice clarity (55.0 percent) and number of dropped calls (25.8 percent). Note that respondents could select all options that applied (Table 8, Figure 8). These results are not surprising, as igr has consistently found voice reception as a common yardstick against which U.S. users evaluate their wireless service experience, and signal strength and voice clarity as usual measures for that experience. It is also interesting to note that these results changed very little from a comparable survey in Table 8: Factors Considered in In-Home Voice Reception, U.S. Consumers In-Home Reception Factors Percent Strength of the signal ("number of bars" on your phone) 63.6% Voice clarity 55.0% Number of dropped calls 25.8% Amount of time before a call goes through 25.7% 22

26 In-Home Reception Factors Percent Number of missed calls 17.6% All of the above 13.7% Other 3.8% Figure 8: Factors Considered in In-Home Voice Reception, U.S. Consumers 70% 60% 50% 40% 30% 20% 10% 0% Strength of the signal ("number of bars" on your phone) Voice clarity Number of dropped calls Amount of time before a call goes through Number of missed calls (i.e., phone doesn't ring) All of the above Other When the factors considered in rating in-home voice receptions were analyzed further, the following trends were also noted. Those who reported excellent in-home voice reception were more likely to have considered signal strength, voice clarity and the amount of time before a call goes through in their rating. However, those with poor or good reception were more likely to consider the number of missed calls and the number of dropped calls. 23

27 Those who use their phone for personal use only were slightly more likely to consider signal strength, voice clarity and the amount of time before a call goes through in their rating. However, those who use their phone for both personal and work use were much more likely to consider the number of missed calls, the number of dropped calls, and all of the above. Smartphone owners were much more likely than basic phone owners to consider number of missed calls and number of dropped calls. Apple ios device users were more likely than Android users to consider number of dropped calls. Respondents who live in urban areas were more likely than suburban or rural respondents to list amount of time before a call goes through and number of missed calls. Single respondents were more likely than married respondents to list amount of time before a call goes through and number of missed calls. In-Home Data Reception igr asked respondents to describe the quality of the mobile data reception inside their home. As seen in Table 9 and Figure 9, the majority of respondents (69.5 percent) indicated that their in-home data reception was excellent or very good. A small number of respondents (3 percent) were aware that they never use mobile data, but are instead using their home WiFi network. Table 9: Perceived Quality of In-Home Data Reception, U.S. Consumers Rating Percent Excellent 35.5% Very Good 34.0% Good 20.4% Poor 5.2% Terrible 1.5% I don't know - my smartphone automatically connects to my home WiFi network 3.1% 24

28 Figure 9: Perceived Quality of In-Home Data Reception, U.S. Consumers 40% 35% 30% 25% 20% 15% 10% 5% 0% Excellent Very Good Good Poor Terrible I don't know -- my smartphone automatically connects to my home WiFi network The following trends were also noted when the ratings of in-home data reception were analyzed. In-home data reception quality appeared directly related to the likelihood to recommend the carrier. Promoters, those respondents who gave a likelihood of nine or 10 to recommend their carrier, were significantly more likely to report excellent or very good in-home data reception. Respondents with Verizon Wireless as their primary service provider were somewhat more likely than T-Mobile, AT&T Wireless, and Sprint Nextel subscribers to rate their in-home data reception as excellent. Respondents with an unlimited data plan were more likely than those with a limited data plan to rate their in-home data reception as excellent. Suburban and rural respondents were more likely than urban respondents to rate their in-home data reception as excellent. 25

29 Respondents in the West region of the U.S. were less likely than respondents from other regions to rate their in-home data reception as excellent or very good year olds and year olds were the two most likely groups to rate their in-home data reception as excellent. Married respondents were more likely than single respondents to state that their in-home data reception is excellent. Respondents with children between the ages of zero to fourteen in their household are more likely to rate their in-home data reception as excellent. 26

30 Definitions General ARPU (Average Revenue Per User): The average amount of money a subscriber spends each month on their wireless service. CAGR (Compounded Annual Growth Rate): A formula used to calculate the growth rate over a period of time. Churn: The percent of subscribers who discontinue wireless usage with the carrier in a given month. CPGA (Cost Per Gross Addition): The average marketing, handset subsidy, and other costs incurred by an operator to acquire a new subscriber. Penetration: The percentage of a country or region s population that has adopted a given technology or service. Postpaid: The traditional method of service billing where the customer receives a bill at the end of the month detailing what they owe for the month s usage. Postpaid plans are generally packaged with service contracts that provide phone subsidies. Prepaid: A method of paying for wireless service prior to use, either by purchasing a bucket of usage at the beginning of the month or drawing from an account with stored value on a per usage basis. Prepaid plans generally forgo service contracts or credit checks and are unlikely to provide phone subsidies. Device Types Embedded Modem: A modem that is internally embedded in a device to give the device mobile broadband access. Most laptops and netbooks can be configured to come with embedded modems. Ereader: Ereaders are portable devices specifically designed for reading digital books, newspapers, magazines, and other literary content. Though ereaders may perform a variety of functions, their focus on reading differentiates them from other devices. Examples include the Amazon Kindle, the Sony Reader, and the Barnes & Noble Nook. Feature Phone: A conventional cellular phone for calls, SMS, and other simple tasks with an ordinary, 10-digit keypad and, usually, a camera. Netbook: A highly portable laptop that is generally smaller, lighter, cheaper, and more energy efficient than a laptop, at the expense of processing power. Resultantly, many netbooks use legacy or specialized operating systems, such as Windows XP, Windows 7 Starter Edition, or custom Linux distributions. Some netbooks are subsidized when sold in conjunction with 3G mobile broadband service contracts. 27

31 Portable Modem: A modem packaged in a portable form such as a USB Dongle or ExpressCard that can be used to give compatible devices mobile broadband access. Smartphone: A cellular phone that uses a recognizable operating system with an advanced web browser and the capability to install third-party applications. Common smartphone operating systems include Apple s ios, RIM s BlackBerry OS, Palm s webos, Google s Android, Microsoft s Windows Mobile, and Nokia s Symbian Platform. Tablet: A portable computing device that, unlike laptops or netbooks, uses a touch screen as its primary method of input, not a mouse and keyboard. Tablets are generally larger than smartphones, but smaller than laptops. One examples of a tablet is Apple s ipad. Texting Phone: Similar to a feature phone, except has a full QWERTY keyboard, virtual or physical, for convenient messaging. Texting phones often have support for , some form of web access, and playing music. Services IM (Instant Messaging): a form of live, text based communication between two or more users. A plethora of IM services exist and two users generally must be using the same service in order to chat. Popular IM services include AOL IM (AIM), Yahoo! Messenger, Google Talk (GTalk/GChat), and MSN Messenger. IMS (IP Multimedia Subsystem): a framework originally developed by the 3GPP for delivering multimedia services over an all-ip network, such as voice calling, messaging, video calling, IP TV, or IP radio. MMS (Multimedia Messaging Service): an improved version of the popular SMS that allows for the inclusion of larger amounts of text, images, audio, and even video. NFC (Near Field Communications): a high frequency wireless technology used at extremely short range. NFC is often implemented in wallet style cards (such as credit, identification, or mass transit cards) as an alternative to magnetic strips, allowing users to make so called blink transactions where their card is held in front of a card reader instead of being slid through it. NFC chips can also be embedded in mobile devices to allow the device to make blink transactions. SMS (Short Message Service): often referred to as text messaging or simply texting, SMS is a text based communication service used to send short messages (generally under 160 characters in length) between mobile phones. VoIP (Voice over IP): a term used to describe any service that provides voice communications over a network with IP-based architecture. This could refer to services such as Skype, which provide voice calling over the Internet s IP network, or a voice service for a carrier that is being delivered over an all-ip mobile network. 28

32 Network Technology 1G (First Generation): a generic term to describe analog mobile telecommunications technologies, such as AMPS (Advanced Mobile Phone System) and TACS (Total Access Communication System). 1X: shorthand for CDMA2000 1X (also known as IS-2000), a 2.5G, CDMA based technology developed by Qualcomm that builds on cdmaone and is capable of peak data rates of 153 Kbit/s. 1X can be upgraded to 1X Advanced, which increases voice and data capacity. 2.5G: a term used to describe to mobile communications technologies evolved from 2G technologies that served as a transitional step to 3G networks, such as EDGE and 1X, which achieved higher voice and data capacity than their 2G counterparts. 2G (Second Generation): a generic term to describe early digital mobile communications technologies, such as cdmaone, GSM, and iden. 3G (Third Generation): technically used to describe technologies that fulfill the ITU s IMT-2000 requirement, but in practice a generic term to describe advanced wireless technologies that are capable of high data rates, such as UMTS and EV-DO. 3GPP: Third Generation Partnership Project is a collaboration between multiple telecommunications associations, known as the Organizational Partners, with the principle goal of making a globally applicable 3G mobile phone system specification based on evolved GSM specifications. The 3GPP is designed to work within the scope of the IMT-2000 specs. Today, 3GPP is principally tasked with development of LTE and LTE-A specifications. 4G (Fourth Generation): used to describe technologies that fulfill the ITU s IMT-Advanced specifications, such as WiMax 2 and LTE Advanced. 4G technologies have flexible channel bandwidths; peak speeds of 100 Mbit/s when mobile and 1.5 Gbit/s when fixed; high spectral efficiency; smooth handoff between different network types; and a flat, all-ip network architecture. In practice, 4G is also used to describe technologies that nearly meet these requirements such Mobile WiMAX and LTE. CDMA (Code Division Multiple Access): an FDD approach to wireless communications where each transmission is digitized and then tagged with a code. The mobile phone is then instructed to decipher only a particular code to pluck the right conversation off the air. The process can be compared in some ways to an English-speaking person picking out in a crowded room of French speakers the only other person speaking English. cdmaone: a CDMA based 2G network technology developed by Qualcomm that is also known by its technical name, IS-95, or just CDMA for short. DAS: Distributed Antenna System is a network of spatially separated antenna nodes connected to a common radio that provides wireless service within a geographic area or structure. 29

33 E-UTRAN: Evolved UMTS Terrestrial Radio Access Network is the air interface for LTE. EDGE (Enhanced Data rates for Global Evolution): a 2.5G technology for GSM and TDMA networks that offers peak mobile data downlinks speeds of up to 384 Kbit/s in end-user devices. EMS: Element Management System are the systems and applications used to manage network elements on the network element management layer (NEL) of the Telecommunication Management Network (TMN) model. enode B: E-UTRAN Node B is the base transceiver station hardware in LTE networks. Node B uses the WCDMA/TD-SCDMA as the air interface technology. enode B is therefore the enhanced version of Node B. EPC: Evolved Packet Core is the core IP processing functionality for LTE and beyond, as defined by the SAE. EV-DO: shorthand for CDMA2000 1xEV-DO (also known as IS-856), a CDMA based 3G technology developed by Qualcomm and supported by the 3GPP2 that builds on 1X and supports entirely packet based networks. The first iteration of the technology, Rel. 0, can be upgraded to Rev. A, Rev. B, Rev. B Multi-Carrier with a hardware upgrade, and even EV-DO Advanced. Rev A, the most deployed version of the technology, is capable of peak rates of 3.1 Mbit/s in a 1.25 MHz channel. FDD (Frequency Division Duplex): segregates uplink and downlink operations into two spectrum bands of equal width (paired spectrum bands), which are separated by one or more other bands to avoid interference. Fixed WiMax: the common name for d, since it does not support client or terminal mobility. GPRS (General Packet Radio Service): a technology for data transmission on GSM networks. GSM (Global System for Mobile Communications): a TDMA based 2G air interface technology used throughout the world. HETNET: Heterogeneous Network is a network connecting computers and other devices with different operating systems and/or protocols. In wireless, HetNet indicates the use of multiple types of access nodes, including macrocells, picocells, femtocells and/or WiFi, in order to offer wireless coverage in an environment with a wide variety of wireless coverage zones. HSPA: High Speed Packet Access is an amalgamation of High Speed Downlink Packet Access (HSDPA) and High Speed Uplink Packet Access (HSUPA) that supports increased peak data rates of up to 14 Mbit/s in the downlink and 5.76 Mbit/s in the uplink. Evolved HSPA (also known as HSPA+) is a wireless broadband standard defined in 3GPP release 7 and 8 of the WCDMA specification that provides data rates up to 84 Mbit/s in the downlink and 22 Mbit/s in the uplink (per 5 MHz carrier) with MIM) technologies and higher order modulation. 30

34 HSS: Home Subscriber Server is the central network database that contains user-related and subscription-related information. The HSS provides mobility management, call and session establishment support, user authentication and access authorization. The HSS is based on pre-rel-4 Home Location Register (HLR) and Authentication Center (AuC). iden (Integrated Digital Enhanced Network) is a 2G TDMA based mobile communications technology developed by Motorola that provides users with the benefit of Push To Talk (walkie talkie style) communication. IMS: IP Multimedia Subsystem is an architectural framework for delivering Internet Protocol (IP) multimedia services, originally designed by the 3GPP as a part of the vision for evolving mobile networks beyond GSM. LTE (Long Term Evolution): a OFDMA based 3GPP standard, generally branded as 4G, that uses an all-ip flat network architecture and is capable of peak downlink speeds 100 Mbit/s and uplink speeds of 50 Mbit/s when deployed in a 20 MHz channel, and even higher rates if used with MIMO to deploy LTE in multiple channels. LTE is generally FDD, but also has an TDD implementation, TD-LTE. LTE-Advanced: a 3GPP standard that builds off LTE, offering even greater channel flexibility and peak data rates of more than 1 Gbit/s. MIMO (Multiple Input Multiple Output): the use of multiple antennas at both the transmitter and receiver to increase spectral efficiency and link reliability. MME: Mobile Managed Entity is the key control-node for the LTE accessnetwork. It is responsible for idle mode UE (User Equipment) tracking and paging procedure including retransmissions. Mobile WiMax: the common name for e, since the technology includes support for high-speed client mobility. Mobile WiMax networks are not backwards compatible with Fixed WiMax networks and offer peak speeds of up to 40 Mbit/s in a single 20 MHz channel. NGMN: Next Generation Mobile Networks Alliance is an industry association founded to develop a common solutions view of next generation wireless networks. OFDMA (Orthogonal Frequency Division Multiple Access): and advanced method of wireless communications that uses complex channel division methods to achieve minimal interference, high spectral efficiency, and efficient use of MIMO. PGW (PDN Gateway): PDN Gateway provides connectivity from the user equipment (UE) to external packet data networks by being the point of exit and entry of traffic for the device. A UE may have simultaneous connectivity with more than one PGW for accessing multiple PDNs. The PGW performs policy enforcement, packet filtering for each user, charging support, lawful interception and packet screening. PGW also provides for mobility between 3GPP and non-3gpp technologies such as WiMAX, CDMA 1X and EvDO. 31

35 RAN: Radio Access Network the physical radio layer at the front of each wireless network. Provides the RF connection to the end user device. S-GW: Serving Gateway routes and forwards user data packets and acts as the mobility anchor for the user plane during inter-enodeb handovers. The S-GW also manages mobility between LTE and other 3GPP technologies (terminating S4 interface and relaying the traffic between 2G/3G systems and PGW). SAE: System Architecture Evolution is the core network architecture of 3GPP's LTE wireless communication standard. SGSN: Service GPRS Support Node is responsible for the delivery of data packets from and to the 2G and 3G mobile base stations within its geographical service area. Its tasks include packet routing and transfer, mobility management (attach/detach and location management), logical link management, and authentication and charging functions. SON: Self-Organizing Network has been defined by the 3GPP and NGMN as a framework for functions on future radio access networks that make it easier to plan, configure, manage, optimize and correct radio networks. TDD (Time Division Duplex): a method of separating a channel s uplink and downlink signals by assigning each unique time slots, allowing use of a single, unpaired block of spectrum. TDMA (Time Division Multiple Access): a TDD method of wireless communications that allows many users to access a single radio frequency channel without interference by allocating unique time slots to each user within each channel. UMTS (Universal Mobile Telecommunications System): the 3GPP s standardized CDMA based approach to 3G cellular systems. UMTS includes technologies such as W-CDMA (Wideband CDMA), HSPA (High Speed Packet Access), and HSPA+. In a 5 MHz channel, HSPA+ can reach peak download speeds of 21 Mbit/s, or even higher if deployed with MIMO. WiFi: Wireless Fidelity is a wireless network for connecting computing devices, as defined by IEEE in the 2.4 GHz, 3.6 GHz and 5 GHz frequency bands. WiMax (Worldwide Interoperability for Microwave Access): refers to set of implementations of the IEEE s wireless network standards supported by the WiMax Forum, which certifies vendor equipment to ensure interoperability. WiMax requires an all-ip, network architecture, makes uses of OFDMA, and generally uses unpaired, TDD spectrum. WiMax 2: the common name for m, which is expected to be the first truly 4G WiMax technology capable of mobile data speeds up to 120 Mbit/s in a single 20 MHz channel m will succeed e, with which it is backwards compatible. 32

36 About igr Disclaimer igr is a market strategy consultancy focused on the wireless and mobile communications industry. Founded by Iain Gillott, one of the wireless industry s leading analysts, we research and analyze the impact new wireless and mobile technologies will have on the industry, on vendors competitive positioning, and on our clients strategic business plans. Our clients typically include service providers, equipment vendors, mobile Internet software providers, wireless ASPs, mobile commerce vendors, and billing, provisioning, and back office solution providers. We offer a range of services to help companies improve their position in the marketplace, clearly define their future direction, and, ultimately, improve their bottom line. Note that Iain Gillott currently serves as an independent director for Wmode, Inc. A more complete profile of the company can be found at The opinions expressed in this report are those of igr and do not reflect the opinions of the companies or organizations referenced in this paper. All research was conducted exclusively and independently by igr. 33