Small cities show higher smartphone penetration: Ericsson Consumer Lab

Three in five smartphone users use mobile broadband in urban India. Mid-size and small cities are showing higher smartphone penetration levels at 33 percent, as opposed to the smartphone penetration levels of 27 percent in big non metros and large cities, finds Ericsson Consumer Lab report.

It also highlights that with the decrease in smartphone prices, the adoption of mobile internet within the lower socio-economic segment has increased over the last two years, from 38 percent in 2013 to 45 percent in 2015.

Ericsson Consumer Lab released a new report titled ‘The Changing  Mobile Broadband Landscape’ which highlights the evolving mobile broadband adoption and usage in urban India. The report focuses on consumers from different socio-economic backgrounds who are using mobile internet on smartphones. The study reveals diverse behavior and needs of different mobile broadband users and the need for service providers to offer personalization. Users’ needs are evolving as usage of services and applications on smartphones is becoming a way of life.

At the same time, the proportion of smartphone users above the age of 50 has quadrupled, from 1 percent in 2013 to 4 percent in 2015. The primary motivation for this increase is the desire to be connected with loved ones in different parts of the country and the world, particularly through emails, chat applications and instant messaging.

“The internet is finally coming of age and is empowering cross sections of Indian society.  Though the most used smartphone services in India are for social networking and instant messaging, the usage of banking, e-commerce, navigation and cloud storage apps and services is increasing. It is for this reason we are seeing uptake and digital transformation of many industries like retail, transportation, and banking,” said Ajay Gupta, Vice President and Head of Strategy and Marketing, Ericsson India.

Video streaming accounts for the fastest growing service on mobile data, followed by social networking. About 70 percent of mobile broadband smartphone users regularly stream videos on their smartphones, and 61 percent use social networking. Indian smartphone users are also seeing greater potential in mobile broadband when it comes to facilitating the way they handle their money and personal finances. The convenience and improved experience makes m-commerce services attractive to Indian smartphone users. Of those users not using e-commerce services currently, 58 percent stated that they would begin to do so in the next six months, while 52 percent will use the internet to pay bill online. Services like location navigation while travelling and cloud storage are also seeing an upswing in usage.

Users face differing mobile data issues depending upon location. Connection quality and reliability problems have a higher tendency to occur indoors, while session failures and poor app accessibility are problems faced by outdoor smartphone users. Around 63 percent of users report that they face quality and reliability issues, such as lost connections and inconsistent network speeds, when using mobile networks indoors. App-related issues while outdoors or commuting, such lengthy lag times, apps taking a long time to refresh, maps failing to load, and session failures affect 68 percent of consumers. Such problems are more common in mid-size and small towns compared to large cities.

For those consumers in India who do not use mobile broadband, affordability and digital literacy are the prime obstacles to adoption. About 88 percent of Indian consumers on 2G feel that mobile broadband is too expensive. 53 percent feel that mobile broadband adds no value and as many as 48 percent believe there is no difference between 2G and 3G speeds.

Mobile internet usage is expected to grow with the consumers’ better understanding of the data plans on offer. As per the study, only 10 percent of mobile internet users feel they understand their plan perfectly, and are able to make an accurate judgment when deciding on a plan. "When consumers are confident in their understanding of what is offered, they tend to perceive better value from it. In fact, they consume twice as much data compared to users who find it difficult to understand their plan,” Gupta added.