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Mass smartphone adoption threatens operators' profits

The rising uptake of smartphones threatens to damage the profitability of operators, according to a new report published on Tuesday.

Research carried out on U.K. consumers by managed customer services firm WDSGlobal claims that a combination of expensive subsidies, flat rate data tariffs, complex service set-up and a high cost-to-support means it can take up to 16 months for an operator to breakeven on every new smartphone user.

"The cost of selling and supporting smartphones is significantly higher than it is for the traditional feature phone segment. Operators are therefore keen to ensure their subscribers maximise the advanced revenue-generating features of smartphones," said a statement from Tim Deluca-Smith, vice president of marketing at WDSGlobal.

However, WDSGlobal's research found that almost a third of consumers experience difficulty setting up email, while 21% struggle to set up the Internet on their device.

"Consumers are being sold on the idea that smartphones can deliver complete connectivity, keep you entertained and offer exciting apps. Get it right and operators can build highly-loyal and highly-profitable subscriber bases," said Deluca-Smith.

"Unfortunately, the out-of-box experience can be very different."

To make matters worse, the survey found 27% of respondents were unable to resolve their smartphone issues using the options available to them, and 10% didn't even try to solve them, electing instead to abandon using the service altogether.

Resolving smartphone issues also takes on average 30% longer than with feature phones, according to WDSGlobal.

"A large percentage of consumers are struggling with the advanced functionality of the smartphone, and are defaulting back to more familiar voice and SMS services," said Deluca-Smith, who commented that these factors combined can quickly erode an operator's margins.

WDSGlobal's research included a survey of 1,000 U.K. consumers carried out in March.

Источник: Total Telecom

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