OpenVault: Broadband Internet Usage Accelerated in 2018
Executive Summary:
U.S. households consumed an average of 268.7 gigabytes (GB) of data in 2018, up from 201.6 GB for 2017, according to a new report about U.S. household broadband data consumption from OpenVault, a provider of data consumption and analytics software. Median usage was 145.2 GB per household in 2018, up from 103.6 GB in 2017. The increase in average consumption was 33.3% and the increase in median consumption was 40%.
Open Vault attributed the different growth rates to growing consumption across service providers’ entire subscriber bases, rather than growth only among heavy users. Their year end 2018 data showed that:
U.S. Household Broadband Data Consumption:
- Average usage for households with flat-rate pricing was 282.1 GB per household, which was more than 9% higher than the 258.2GB average usage for households on usage-based billing (UBB) plans. Average usage for all households was 268.7GB/HH in 2018, up from 226.4GB/HH at the end of June 2018 and a 33.3% increase over the YE 2017 average of 201.6GB/HH.
- Median usage was 145.2GB/HH in 2018, up from 116.4GB/HH in June 2018 and a 40% increase over the YE 2017 median of 103.6GB/HH.
- The percentage of flat-rate (non-UBB) households exceeding 1 terabyte (TB) of usage was 4.82%, a full percentage point higher than the 3.81% of UBB households that exceeded the 1 TB threshold.
- The percentage of households using 1TB or more almost doubled in 2018, rising to 4.12% of all households from 2.11% in 2017, while the percentage of households exceeding 250 GB rose to 36.4% from 28.4% during the same time frame.
In addition to analyzing trends in broadband consumption, OpenVault also tracked expansion within the US consumer device landscape, observing a 5.3% increase in connected devices when comparing the week after Christmas with the week before Christmas. While Amazon, Samsung and Apple collectively accounted for the majority of the growth, the 15.6% rate of increase for Amazon devices was significantly higher than the rates of growth for Samsung (4.1%) and Apple (2.9%).
“As connected devices, streaming services and broadband speeds increase, service providers need an alternative to infrastructure upgrades that would enable them to keep up with demand,” said Josh Barstow, Open Vault executive vice president of corporate strategy and business development, in a prepared statement about the U.S. household broadband data consumption research. “Our analysis makes it clear that usage-based billing is among the most effective tools the industry has in managing consumption and reducing the need for massive capital expenditures.”
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Are consumers willing to pay (more) for 5G?
Two recent studies highlighted consumers’ willingness to pay a premium for 5G service, but devices, and whether 5G actually provides a new kind of customer experience, could prove to be sticking points.
Matrixx Software recently surveyed more than 4,000 mobile users in both the U.S. and the U.K. to ask about the value that users place on next-generation networks. Matrixx concluded that “respondents revealed a willingness to open their wallets if 5G delivers an enhanced connectivity experience.”
“The feedback from consumers paints a very clear picture for operators — ‘deliver a 5G experience worth the attention, and we’ll gladly pay for the privilege of using it,’” said Dave Labuda, founder, CEO and CTO of Matrixx Software. He added that “5G presents a real opportunity to deliver a powerful value-add to the consumer,” but went on to say that “Speed to network isn’t the whole battle. The operator who wins the 5G race will be the one to deliver an entirely new experience that trumps what is available to consumers today.”
Matrixx’s survey also found that 16% of those surveyed were not willing to pay more for 5G — either because their current service was good enough; they figured that carriers would eventually provide 5G anyway; they simply couldn’t afford to pay more; or they felt that the potential benefits didn’t justify the added cost.
Both the Matrixx survey and a PwC survey from last fall found that consumers were, at least at some level, dissatisfied with current mobile and/or home network services and are hoping 5G can resolve their issues. The Matrixx survey found that with “nearly 70 percent of mobile users surveyed across both continents [complained]that 4G connectivity is too slow, isn’t available everywhere, and connections are not reliable in heavy traffic areas.”
The PwC survey, conducted last fall across a statistically representative sample of 1,000 Americans between the ages of 18-64 who have access to the internet, found that despite relative overall satisfaction with home and mobile services, there is “mounting frustration with overall reliability, speed and cost” of current offerings. In particular, PwC that more consumers were “completely satisfied” with their mobile internet experience than their in-home one and that faster internet access via 5G was the primary reason that users were willing to pay more for 5G.
PwC reported that 33% of respondents said they would pay more for 5G in the home, while 31%
would do the same for mobile. On average, end users were willing to pay an extra $5.06 per month for 5G service to the home and an extra $4.40 per month for mobile 5G.
Matrixx’s survey showed an overall promising picture of willingness to pay — and pay more — for 5G, if carriers can deliver a better consumer experience. The company found that of the 33% of consumers who were confident that 5G would solve their connectivity issues, 87% planned to upgrade to a 5G device and 78% were willing to pay more for such devices; 88% indicated willingness to pay more for 5G network access; and 76% said that they would switch carriers to get 5G service.
PwC, meanwhile, found that seven out of ten respondents said that if they needed a new device to utilize 5G, they would wait until they were eligible for an upgrade rather than buying a new device as soon as it was available.
References:
https://www.businesswire.com/news/home/20190124005263/en/5G-Customers-Pay-Promise/
https://www.pwc.com/us/en/services/consulting/library/consumer-intelligence-series/promise-5g.html
https://www.rcrwireless.com/20190124/5g/are-consumers-willing-to-pay-more-for-5g
Kagan: Broadband-only Households to Reach 40.8M by 2023
As consumers continue to cut the pay TV cord, broadband-only households could nearly double to 40.8 million by 2023 from their current level of about 23.3 million homes, according to Kagan, a media research group within S&P Global Market Intelligence.
“The steep upward trend due to ‘cord-cutting’ is not surprising given the abundance of online video services on the market, although this could be a circular argument, with more companies jumping on the streaming video bandwagon in response to the growing broadband-only market,” said senior Kagan research analyst Tony Lenoir, in a statement.
Kagan expects the segment of broadband homes without a traditional multichannel subscription to account for nearly one-third of U.S. households in the next five years. Over-the-top services offered at competitive prices is a major factor in compelling consumers to cut the cord, Kagan found. Other reasons for the strong growth projections of broadband-only growth include the ease of joining and cancelling online streaming services — they typically do not require contracts.
https://www.multichannel.com/news/kagan-broadband-only-households-to-reach-40-8m-by-2023