Mobile data can change the game

Memo to all you network operators: the race to zero is heating up.
That’s the takeaway from a recent (but little-noticed) survey of 2,000 mobile users from comScore Inc. The market research firm found that 22% of consumers cited better coverage as the primary reason for switching carriers — down substantially from 27% in a November 2006 survey — while price was the deciding factor for 19% of users, an increase over the 14% in the prior poll.
It’s probably not news that mobile service — which, to most U.S. consumers, still means only voice and text — is becoming a commodity. And that trend is likely to continue as carriers rush to out all-you-can-eat the competition, adding messaging and Web browsing to unlimited calling plans at rates unthinkable just a year ago.Serge Matta, a comScore SVP, tried to paint a rosy picture from the results, claiming in a press release that “cellular phones are quickly transitioning from being viewed by consumers as a simple communication device to a multi-functional media and entertainment consumption device. “There is,” Matta continued, “a significant opportunity for mobile carriers, advertisers and product developers to capitalize on the industry’s continued trend toward consumer dependence on cellphones.”
But how that “significant opportunity” extends to operators is puzzling, given comScore’s findings. Coverage and price were the top two reasons given for changing operators, followed by “friends and family subscribe to the carrier” (17%) and plan features (12%) such as off-peak minutes, free in-network calling and the ability to retain unused minutes (all of which relate to price, as Matta pointed out). Rounding out the list: promotional offers (9%), better minute-level plans (7%) and the desire for a specific phone (3%).
So where are the sexy applications that should, by now, be differentiators in the minds of consumers? Where is Verizon’s Vcast? AT&T Mobility’s MEdia Net? Sprint Nextel Corp.’s Game Lobby? Hell, where are the Web-browsing offerings?
Countless consumers will never use their mobile phone for anything but making calls and — maybe — text messaging. And it’s probably still too early to expect any single wireless application to move the needle enough to lure a crowd of users to switch carriers. But unless the operators get serious about developing compelling, consumer-friendly mobile data services — and then effectively marketing those offerings — users will increasingly see price as the way to differentiate one service provider from another. And that’s bad news for nearly every carrier in the market.