Friday, January 25, 2019

Are Consumers Happy or Unhappy with 4G? And What of 5G?

Are consumers generally unhappy with 4G, or generally happy? And to the extent there are issues, are they mostly coverage or mostly speed or mostly something else? Those are hard questions to answer.

Among the “something else” factors are crucial underpinnings such as recurring fees or device prices or customer service or other attributes of experience that have nothing to do with the network in a direct sense.

Also, key changes in how consumer offers are packaged have occurred, including the general end of device subsidies and contracts, nearly universal use of Wi-Fi offload and a new shift back to unlimited usage. Any or all of those trends could affect satisfaction more than anything to do with the network and its performance.

Perhaps the biggest “something else” is simply the fact that U.S. consumers have in recent decades always ranked communications services (mobile, fixed, linear video, internet access) at the bottom of all industries. In fact, internet access and subscription TV rank at the very bottom of all industries studied by the American Consumer Satisfaction Index.

Still, mobile service always ranks higher than the other services, and has been climbing, in terms of satisfaction scores, since 2004, though some firms have moved higher than others.

Some surveys might show a flattish to lower satisfaction level between 2010 and 2016, in the U.S. market. It might said that the percentage of “very satisfied” customers has dipped since 2010, with Verizon and Sprint falling towards the mean and AT&T and T-Mobile US rising.

It is not clear how much such ratings are attributable to firm actions, consumer preferences, device attributes or something else. Still, that time period covers the 4G era, and one can argue that overall consumer satisfaction has dipped over that period.


That noted, T-Mobile US clearly has outperformed, Sprint underperformed. So satisfaction is supplier specific. So is dissatisfaction, in all likelihood.

A survey conducted of 4,000 U.K. and U.S. smartphone users suggests that the biggest problem users have with 4G is coverage, followed by speed. Still, the overwhelming number of complaints are over coverage, one way or the other.

And coverage might actually be worse in the early years of the 5G era, compared to 4G. The results appear to show (I have not seen the full results, or the way questions were asked, nor the results separated by country) that coverage is a problem for perhaps 35 percent of users. But note that coverage issues such as “not reliable in high traffic areas” and “can’t find a signal” both are coverage issues.

That might suggest the possibility that consumer satisfaction with 5G will not materially increase on the coverage front, and could get worse.


None of the findings on satisfaction should be too surprising.

If you work with statistics long enough, you are certain to find instances where the meaning is found in what is growing or shrinking; where volume is high or low. The meaning simply depends on the context.

Likewise, if you follow consumer survey results long enough, you are bound to conclude that people often say they will or will not take some specific action; often claim they are quite unhappy with a product only to keep buying it at high levels; or claim they will spend significant amounts on new products, but then fail to do so, choosing other less-expensive alternatives.

In other cases, willingness to spend is robust, and almost certainly correct in the long term, simply because, in the long term, there will be strong incentive to do so. One might point to consumer appetite for 3G devices and services as 3G replaced 2G, or as 4G displaced 3G.

That might be the case for a new survey of U.K. and U.S. consumer satisfaction with 4G, and willingness to spend more on 5G devices and services. The obvious caveat is that the actual price increases for 5G devices and services are not tested.

As Steve Jobs often quipped, consumers cannot assess the value of something they never have seen. The corollary is that they cannot accurately predict what value is there and what price they might pay to gain satisfaction.

Consumers often indicate--in surveys--willingness to spend more than they seem to do in practice. Of course, if one believes 5G will fix present coverage issues, consumer enthusiasm is logical.

Among respondents to a recent survey of U.K. and U.S. consumers, 87 percent of respondents who believe 5G will be the answer to their connectivity issues plan to upgrade their phones to a 5G-enabled device.

Those respondents also indicate they are willing to pay more for 5G service and devices. Such consumers perhaps are going to be disappointed, initially. Coverage is not likely to be an area where 5G is better than 4G, at first.  

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