Product Management :: Product Marketing

01 September, 2011

Mobile Internet penetration nearly at 50%

In a widely reported report from the Office of National Statistics (see BBC report), mobile internet usage has risen from 31% in 2010 to 45% in 2011.

Home usage represented 77% of households, up 4%. Has the market saturated? Very likely, but I strongly suspect there is another effect going: mobile substitution for fixed line internet connection at home. Why bother paying for two internet connections, when smart phone users can tether their home internet requirements to their phone.

Mad as a box of frogs (to quote a former colleague of mine), operators are still permitting unlimited internet connection on their phones. For the sanity of the industry and to protect their future, they must cap this to 500Mb or 1Gb per month (for example). Relying on reasonable use clauses in contracts is insufficient to protect the operators from data hungry customers. More importantly, operators set the correct paradigm: this resource isn't infinite and if you consume more of it, you need to pay more for it.

Internet not needed here
Among the 23% of the population who remain offline, half said they "didn't need the internet." 
The ONS report is the first since dot-com entrepreneur Martha Lane-Fox was appointed as the government's UK Digital Champion, with a brief to increase internet uptake.
In a statement, Ms Lane-Fox said: "That so many offline households don't see any reason to get online reinforces the importance of the digital champions network that the Raceonline2012 partners are creating." 
Bless Martha, what an evangelist, I'd be quite happy with reaching 77% of the population with total addressable market of 88%. Of the remaining 12% of the market, I would assume that they might have additional ways of getting on the super information highway (eg at work)??

Other Tidbits
While 71% of 16 to 24-year-old who went online said they used mobile broadband, just 8% of internet users aged over 65 made use of the newer technology.
Only 71% of 16-24 year olds??? I find this figure unbelievable, at face value. This doesn't (shurely) indicate their usage. I suspect that this democratic borrows internet connectivity from others (eg the library or internet cafes) rather than owns the internet connection themselves.

The ONS survey also found a dramatic rise in the use of wifi hotspots - a seven-fold increase since 2011 - suggesting that the rise of 3G has done little to slow demand for free and paid-for wireless access. 
7 fold increase??? Really? I need to do more research, because I'm not seeing an order of magnitude increase. Comments anyone?

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