Each year, Venture Insights conducts in-depth surveys on consumer behavior and future intentions in the Australian market. This report covers mobile service purchasing drivers.
How do consumers rate network performance?
David Kennedy, MD of Venture Insights said “Past surveys have highlighted the importance of price as a decision factor by consumers. Competitive intensity will keep pressure on ARPUs, which in turn requires a strong focus on keeping costs under control to maintain profitability.”
“But things changed this year. The value of network performance & speed has risen, and it is now equal first with price as a decision-making factor in consumer mobile purchasing.”
“And over the past few years, the importance of regional coverage has grown steadily, which is creating an opportunity for telcos with larger networks to justify higher prices and therefore recover their investments. This also underlines the importance of the Telstra/TPG deal to increase TPG’s coverage in regional areas, and the threat it poses to Optus.”
How is economic downturn influencing consumers?
Bundled media services and bundled handsets remain important, but only to a minority of consumers. Kennedy further commented, “There are also more consumers expecting to pay more for their mobile phone services each year this time around. This is good news for the industry. We believe consumers are increasingly recognizing the value of 5G.”
“But they are also facing higher cost of living because of inflation and are expecting prices of mobile services to increase. This means there will be some room for mobile operators to increase prices without necessarily triggering consumer churn, but this will be constrained by consumers’ capacity to pay which may be inhibited by rising interest rates,” Kennedy said.
There are slightly fewer customers who are considering changing their mobile service providers. The ones expecting to do so are giving more weight to network performance and regional coverage in their decisions, and less on price and data inclusion than before.
This affected the ranking of providers that consumers are more likely to switch away from, with clients of Telstra and its sub-brands now the least likely to report an intention to churn.