SMS Aside, Consumers Pan M-Commerce Data Plans on Price

Digital content like video, games, and music delivered as part of cell-phone subscriber plans may be getting plenty of attention these days, but it's turning out to be a harder sell than many mobile-commerce enthusiasts had thought. Some 72.5% of respondents in a survey of more than 2,500 U.S. wireless subscribers and customers said they did not use any data services besides messaging in the three months prior to the August survey. The survey, whose results were released Monday by high-tech data researcher IDC, Framingham, Mass., also shows that subscription pricing is a primary barrier to making m-commerce content transactions. Some 47% of the respondents in the 18-to-24 age group, considered prime prospects for digital content, said entertainment plans are “too expensive.” This complaint was especially strong with those who use camera phones or who spend $60 or more for cell-phone service. IDC says U.S. consumers are spending, on average, $3.70 per month for data services. One-fifth of respondents bought at least one ring tone in the quarter, while 10% bought a graphic item or a game. “The fact that four out of 10 survey respondents feel they are overpaying for data service does not bode well for the future of this market,” said Lewis Ward, a research manager at IDC, in a statement. Ward also said some respondents called data services a “bad idea” that may interfere with calling. “It's clear from the survey results that many people just want to use their mobile phone to make calls,” he said. Still, simple text messaging, appears to be quite popular, with nearly half of respondents reporting they sent or received at least one short-message-service (SMS) transmission in the third quarter. While some of this traffic could have been used to trigger one-off purchases of content, Ward tells Digital Transactions this use probably accounts for a small proportion of the total volume. As an example, he says only about 10% of those who bought a ring tone did so via SMS short codes. “The vast majority [of SMS] is still person-to-person messaging,” he says. One somewhat significant exception to person-to-person messaging turns out to be news flashes and other such text alerts, which accounted for about one-fourth of all SMS messages in the survey. This result surprised the IDC researchers. “I thought it would be in the single digits,” Ward says.