Failure to launch universal 4G will cost UK economy £120m this Christmas, warns eBay
Despite operator EE rolling out a limited 4G service in select parts of the UK, Another Christmas without universal 4G services will cost the UK economy £120m in lost mobile sales, according to new research from eBay, the leading online marketplace.
As shoppers stock up on Christmas gifts and supplies over the festive season, slow connection speeds are set to pose a barrier for many consumers wishing to shop via their mobile devices. The research reveals that with better connections from the nationwide roll-out of 4G, mobile sales would have been one third more than current predictions, up to £493m from £373m.
This Christmas over half (55%) of consumers plan to use their mobile device more than they did last year to browse the web, while almost the same number say they will use mobile devices to get inspiration for gift ideas and to check prices or product details (39%).
eBay.co.uk meanwhile, expects to see around a third of items in its Christmas campaign bought through a smartphone – leaving no doubt that mobile retail is on the rise among Britain’s hoards of shoppers.
But despite mounting consumer demand, significant barriers still remain as the UK’s legacy network infrastructure continues to creak under the strain of rising volumes of mobile data, which is growing 250% year on year.
The top three barriers preventing consumers from shopping on their mobiles are slow connection speeds, payments timing out and network reliability. 4G holds the key to breaking down these barriers, as 4G networks are built to handle mobile internet and data more quickly, enabling faster connection speeds and more reliable mobile connectivity.
The UK continues to lag behind, while around the world more than 40 countries are already reaping the benefits of national 4G roll-out. Although initial 4G services will be rolled out across ten cities in the UK this month, by the end of 2012 the majority of the UK population will still not be able to make use of 4G – a situation which a third (32%) of consumers consider to be frustrating or unfair.
Clare Gilmartin, vice president of eBay Marketplaces, Europe commented: “Mobile devices have become virtual stores in our pockets, giving us the ability to shop anytime, anywhere. But for consumers, it’s critical that the experience is quick, seamless and simple. Slow browsing speeds and breaking connections are now significant barriers to mobile commerce – and this comes at a high price.
“While we welcomed the move by Ofcom to bring the 4G spectrum auction forward to early 2013 there’s no doubt, as this research shows, that for the UK economy the cost of another Christmas without universal 4G is huge. Consumers are increasingly demanding a better experience, regardless of their network. We hope that the Government will work quickly come the New Year to ensure its promise to deliver 4G for all by the end of 2013 is realised.”
But cost of the service is also seen as putting people off. Analyst IDC believes that even though EE has first to market bragging rights, in reality the operator has priced it as a high end service and so up-take will me slow.
And consumers don’t seem that convinced either. When asked whether the pricing of 4G from EE would put them off upgrading in a survey by Thinkbroadband.com, a massive 70% of the 1,250 respondents said yes, with only 12% giving a clear no. Another 12% want to play the wait and see game.
This suggests that the price sensitivity that has been heightened by people tightening their belts over the last couple of years is impacting on mobile contracts, and possibly faster mobile data speeds is seen as a luxury item rather than a must have.
But Steve Hurn, CEO of Reevoo, the social commerce solutions provider, thinks that even the limited EE launch is a start and is looking forward to mobile broadband in 2013.
“The launch of 4G is great news for the retail industry. Mobile commerce is one of the fastest and most exciting areas of growth in retail at the moment, and a key component of what we already know is a multi-channel purchase journe,” he says. “The brand experience that retailers are able to deliver over the mobile Web or dedicated apps is improving all the time. We know how much a rich and integrated mobile experience is important for consumers and with 4G retailers and brands will have new ways of getting in touch and engaging with their customers. 4G is a positive development for both retailers and consumers, opening new possibilities for social commerce activities too, as it will continue to facilitate the multi-channel experience, driving cross-channel sales by providing an ever-more rich and sophisticated experience for mobile and tablet shoppers.”