US smartphone users enticed by sponsored data plans, reports survey

US smartphone users are open to using sponsored data plans driven by fear of exceeding their mobile data limit, according to research published today.

Sponsored data plans have become a hot topic in the US telecoms market in recent months after AT&T launched an initiative in January that allows businesses to cover the transmission cost of content they provide to consumers. The Sponsored Data service enables customers to view sponsored content and use apps over the operator’s HSPA+ and LTE networks without that data usage coming out of their monthly plan.

The operator said at the time that it envisions use cases for potential sponsors including the promotion of movie trailers or games, providing healthcare support to patients, encouraging customers to browse mobile shopping sites and allowing firms with a “bring your own device” policy to cover the cost for employees to use business related services.

However, the move caught the attention of US authorities keen to maintain the ‘openess’ of the internet. Anna Eshoo, a ranking member of the US Communications and Technology Subcommittee, said in a statement that AT&T’s announcement “puts it in the business of picking winners and losers on the internet, threatening the open internet, competition and consumer choice.

Now, research firm Wakefield Research conducted a survey of 1,000 US adult smartphone users on behalf of business software firm Citrix and found that fear of exceeding data charges and incurring overage charges is causing subscribers to open up to the idea of using sponsored data services.

The research found younger users are the most fearful about exceeding their monthly mobile data limit, while adults with children were the group most likely to exceed their limit. It also found that 82 per cent of respondents avoid using specific smartphone apps through fear of exceeding their limit. iPhone users said they were more concerned about overage fees (66 per cent) than Android users (48 per cent). Two-thirds (67 per cent) of users who watch at least one mobile video per month said they have exceeded their mobile data limit, while 36 per cent of subscribers who watch fewer than one video per month reported exceeding their limit. 72 per cent of adults with children also reported exceeding their limit, compared with 46 per cent of adults without children.

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As a result, US subscribers are inclined to use data services if they are sponsored by a content provider, Citrix reported. 71 per cent of men and 62 per cent of women said that they would use sponsored data plans if they were available and reported that they would do so to access bank account information (39 per cent), watch educational videos (33 per cent), advertisements (28 per cent), hold a teleconference (21 per cent) or file an insurance claim (18 per cent).

The firm also reported that younger users are more open to sponsored data plans than older adults, although parents showed more interest in sponsored data plans compared with adults without children.  77 per cent of parents reported that they were likely to carry out the tasks listed in the survey if the data usage was sponsored. 58 per cent of adults without children reported the same.

“Sponsored data plans are likely to be a growing source of revenue for mobile operators. The findings of this survey suggest that although subscribers are keen to consume data, they are also worried about exceeding data limits,” said Chris Koopmans, VP and GM for service provider platforms at Citrix.

“Sponsored data plans are one way in which content providers can engage with their target audience. This research is a first in terms of assessing the subscriber’s desire to receive these plans.”

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