Advanced Television

Study: Euro broadband quality more important then price 

February 20, 2019

A study from consultancy firm A.T. Kearney that investigates the value attached to home connectivity has found that price of broadband and WiFi services is less important to European consumers than factors such as network quality, coverage and access to innovative products.

The report, which looks at the value of home connectivity specifically from the perspective of consumers, finds consumers value ‘collective’ benefits of their home broadband – defined as such things as coverage, network quality and innovation – the most, with 38 per cent citing these as the characteristic of their home broadband service that they find most valuable. This is followed by ‘individual’ benefits – such as speed and bundle size – which were highlighted by 33 per cent of respondents. Price, meanwhile, was ranked as the most important factor for just 16 per cent of people, with flexibility cited by 13 per cent.

A. T. Kearney surveyed 8000 people across eight European countries – the United Kingdom, Belgium, Switzerland, Poland, Ireland, France, Germany and the Netherlands – for the report – Viewed through the Lens of the Consumer: Value Creation in the Telecommunications Sector – commissioned by international TV and broadband company Liberty Global.

Delving further into the link between price and investment in high-quality home broadband services, the report concludes that there is a positive relationship between price levels, investment and benefits delivered to society. It identifies a virtuous circle where positive revenue developments through price create headroom for investment, which in turn impacts on further revenue generation. This is supported by the fact that the top 10 EU countries in terms of relative price levels outperform the bottom 10 across all proxies for benefits to society – including online education, shopping, e-government services, cloud computing and big data analytics – used for the study.

In other findings, the study reveals that access to home broadband and WiFi scores either first, or is in joint first place, in six out of eight European countries surveyed when ranked against such things as holidays, chocolate, a favourite TV channel and even sex. In only two countries – Switzerland and Poland – did home broadband and WiFi access not make the top spot.

The report also looks more broadly at the value attached to broadband by consumers across the generations, finding that broadband & WiFi is considered especially valuable to the youngest generation of respondents (aged 18 – 29) who would, on average, require compensation of €32,500 (around £28,500) to forgo access for one year – four times what the amount required by those aged between 50 and 65.

“We’ve commissioned this research to shine a light on what consumers think is important about their broadband and WiFi services,” advised Manuel Kohnstamm, Chief Corporate Affairs Officer of Liberty Global. “In particular, the report’s key finding that price is lower down the list of priorities for consumers suggests that regulators would do well to find policies that successfully balance all prevailing factors valued by broadband users – including coverage, network quality and innovation – rather than narrowly focusing on the pricing of such services.”

“We fully appreciate that capturing the ‘real’ opinion of customers is always challenging,” admitted Hans Boezel, Principal, Communications, Media & Technology Practice, A.T. Kearney. “However, by focusing on understanding and appreciating the order of magnitude of various findings, this report already provides sufficient guidance for informed debate and decision-making around what is really of importance to a consumer. This not just in the limited time they are in a ‘purchasing mode’, but also when they are actually using the service itself, which they are most of the time.”

Categories: Articles, Broadband, Consumer Behaviour, Markets, Research