High-end consumers have broadband doubts
High-income households are likely to adopt “triple play” and converged services, but many have reservations about the need for broadband, according to a new study.
The study was carried out by BMI-TechKnowledge to examine telecoms usage and buying behaviour of high-income residential customers.
It looked at around 360 respondents with a household income of more than R8 000 per month. BMI-T analyst Tertia Smit, giving ITWeb a preview of the full report last week, said mobile phones account for half the telecoms budget among high-end residential users.
In releasing the full report this week, BMI-T said close to 85% of all the high-end households have DVD players, while 69% have a pay-TV subscription. These households have an average of two PCs and three active cellphone numbers - a substantial proportion of which are on postpaid contracts, said BMI-T.
The Internet accounts for only 12% of the average high-income household telecoms spending, says analyst Tertia Smit.
About one-quarter of respondents were aware they could have a PC bundled with an Internet subscription. However, only a small portion had such a subscription although the interest in such a service was high.
High-end households make up the biggest part of the market for pay-TV services. In future, this type of entertainment functionality could be combined with that of telecommunications in the so-called “triple-play” (phone, broadband Internet and subscription TV) service.
Smit said over a third of respondents without a broadband Internet service said they “had no need of one”. Another third expressed reservations about the costs associated with fast Internet access, and this is affecting broadband adoption.
However, Smit said: “South Africans are not generally known for having a strong ‘consumerism culture’, and this may rub off onto their technology services purchasing behaviour.”
The satisfaction level was above 88% for all aspects of Internet service providers’ service offerings confirming Telkom’s assertion that customers are generally happy with their services, the report said. At the same time, the survey revealed that Telkom dominated the growth in the Internet space in the last year.
Smit noted that while the high cost of broadband Internet services garnered the most media attention last year, the reality is that the Internet accounts for only 12% of the average high-income household telecoms spending. A much larger amount is consumed by cellphone bills and voice calls.
Despite the amount of advertising surrounding technologies like GPRS and 3G, awareness and adoption of these and other cellular technologies are still in an “early adopter” phase - albeit growing rapidly. Around half of the respondents replied they did not intend to use these services, while most of the remainder had not yet given it any serious consideration.
Voice over Internet Protocol (VOIP) adoption is still low, in respect of regular usage, although 14% have already tried it at least once. Most who have tried VOIP did so using Skype or another similar application - with most calls costing next to nothing. Over time, accelerating the rate of penetration of residential broadband could also help to unlock the possibilities of VOIP services in this customer base, which BMI-T believes will remain relatively low for the foreseeable future.
From MyBroadband.