logo EN

17.01.2018

Are Mobile Networks in danger of being seen as mere 'utility' providers?

Mobile network providers are missing out on an opportunity to better meet evolving consumer
needs. Adopting a more proactive and innovative approach to proposition design and architecture could lead to greater market share and consumer engagement. With Ofcom having announced that from July 2019, consumers can ‘text to switch’ provider, it’s going to be more important than ever to have compelling propositions to keep customers on your base. Can the industry reverse the ‘race to the bottom’ or will it become just another ‘utility’ provider, where the key players are competing on price alone?

Historically, the core value proposition of the mobile industry has been the bundling of handset with a tariff plan. Customers were either on a contract with an annual/24 month upgrade cycle or a prepaid tariff. Over time, propositions have evolved hand in hand with advances like the development of smartphones and 4G data connectivity… and, as we know, the mobile phone became an indispensable part of our daily lives.

Fast forward to today and things aren’t quite as simple. GfK consumer insights and sales data in 2017 showed that more and more consumers were separating their mobile phone purchase from their tariff plan. The drivers behind this growing behaviour include a variety of areas that networks and retailers need to understand if they are to successfully position themselves in this part of the changing landscape.

This trend to de-couple the handset from the tariff continued to gain momentum across 2017 suggesting something clearly isn’t working for a portion of the market when thinking of traditional contract propositions. With so many tariffs and handset deals to choose from, many consumers are unclear what’s best for them and are put off from undertaking the process of finding the best deal. GfK Tech Consumer 360 data shows that 26% of UK contract handset upgraders didn’t even consider switching network because of the effort involved in finding an offer that might be better suited.

Whilst many avoid the complicated process of finding a new deal that’s best for them, there are growing numbers who are taking matters into their own hands and favouring non-traditional tariffs and deals as they realise these best meet their needs rather than the traditional propositions out there.

So what can network and service providers do to better address individual consumer needs? And how can they future-proof their propositions, stop competing on price and significantly improve margins, to avoid becoming just another utility provider?

Download paper to find out more

Related Products

  • GfK Point of Sales Tracking

    Product tracking comparison tool measuring market share and brand performance. Data from both retailer and reseller. Regular POS insights across all relevant channels.

    Read more
  • GfK Shopper Behavior

    Support your marketing decisions with comprehensive data and analysis of buyer behavior at all stages of the purchase journey and product lifecycle.

    Read more
  • GfK Why2Buy

    Custom surveys run on GfK’s Consumer Panel to understand the ‘why’ behind shoppers’ purchase behaviour. Results are calibrated to panelists’ purchase behavior.

    Read more

Related Insights

  • 29.06.2020

    News

    Map of the Month: Retail share of private consumption, Europe 2019

    GfK’s Map of the Month for June illustrates the brick-and-mortar retail turnover share of private consumption in Europe in 2019.

  • 26.06.2020

    Reports

    GfK Coronavirus Recovery Atlas: forward mapping for the new market ...

    Our latest in-depth, far-reaching report of market insights, commentary and forward projection for the global TCG market. It is richly illustrated ...

  • 24.06.2020

    Webinars

    GfK Expert Panel - The post-lockdown economy

    Sign up for this on-demand-webinar to get an exclusive insight on how purchasing patterns and retail strategies have changed.

View all Insights