UK smartphone users are sceptical about 4G

News analysis: Has the 4G hype ground to a standstill?

Ofcom's latest '2013 Communications Market' report suggests UK smartphone users say 4G is not a necessity, but are they wrong and will 4G benefit smartphone users?

However, according to Ofcom’s ‘2013 Communications Market’ report, 70 per cent of respondents have no plans to upgrade to 4G when their current mobile contract expires and 22 per cent of smartphone users have no plans to use 4G at all. Their reasons include lack of knowledge and interest in the benefits, cost, complicated 4G jargon, and bound in current contracts.

4G usage is sceptical, whether for personal or business use. Critics suggest 4G offers nothing new and users are satisfied with 3G and Wi-Fi. “There is less hype for 4G compared to 3G and, therefore, consumers are not very excited as there is nothing new; all it does is promise to deliver faster services,” said consultancy firm Ovum’s analyst, Emeka Obiodu. “For the vast majority of customers, 4G will just be an option when their contracts or phones are due to upgrade.”

In theory, 4G networks can operate at four to 10 times the speed of 3G providing benefits such as higher user speeds, meaning users can download more content such as high-definition videos, faster connection times, and less round-trip latency, meaning real-time applications such as videoconferencing and Voice over Internet Protocol are faster and more secure.

Is this enough to entice consumers to adopt 4G? Though industry insiders are pushing for 4G, there are, of course, challenges. “4G has received a muted response from UK consumers so far, as the biggest problem is that most people are satisfied with the existing 3G service and aren’t sure what 4G will offer them, especially as it is significantly more expensive,” explained Robin Kent, director of European operations at telecoms provider Adax Europe.

“Another issue is that most 4G offerings have much more restrictive data allowances than existing plans. Users who take full advantage of data-heavy content such as video-streaming services will quickly find that they breach their allowance, severely limiting 4G’s main advantage.”

Tim Sherwood, vice president at communications provider Tata Communications, explained that while an evolving digital lifestyle is enough of a need to upgrade to 4G, price remains a concern but operators must ensure they make a return on investment. He said: “The problem is that consumers still demand ‘all you can eat’ data tariffs but aren’t prepared to pay extra for access to superfast 4G networks. As a result, mobile operators might get a nasty surprise when, after hundreds of millions of investment, 4G won’t bring the added income they expected.“

Sherwood added: “In order for mass adoption to happen in the UK and globally, 4G needs to be affordable. Mobile operators need to offer data services that will bring consumers freedom to use mobile data according to their usage patterns and needs, and at a reasonable price point. By abandoning unlimited data offers and adopting more sophisticated pricing, operators can get the best ROI on their 4G investment.”

Though tablet users seem the obvious candidates to spearhead 4G adoption, due to their heavy video and music streaming and online gaming, Ovum’s Obiodu said this is not the case. “Current evidence suggests that most tablets are connected via Wi-Fi rather than 3G, as it has never been about the speed per se. Most tablet users are content with sporadic access over Wi-Fi because tablet use is often heavier at home or in the office.”

While the benefits of 4G are clear, it is obvious the adoption in the UK will take time among individuals and business users. Adax’s Kent believes the developing world is ready for 4G. “In mature markets such as the UK, US and Europe,” he said, “3G services have developed to the point where there is currently little or no requirement for 4G in the market. However, 4G is likely to see a much stronger uptake in developing countries.

“While the higher costs might seem prohibitive, the fact that their existing networks are less developed means that 4G can offer a much more desirable leap forward. Many developing nations have skipped landline Internet entirely and rely on mobile networks, which will make 4G even more useful. When you consider the cost of laying the miles of fibre needed to bring broadband to rural villages with few subscribers, erecting a single 4G base station is a very cost effective solution.”

As with any new technology acceptance takes time, but 4G will eventually be in demand. Nevertheless, network operators must make their tariffs more appealing and cost effective for this to happen.

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