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Feature-Rich Mobile Phones Owners Generate Higher ARPU for Network Operators

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The average reported monthly spending for wireless services is US$14 higher among US customers who use a variety of features and services on their cell phone, according to a J.D. Power and Associates study. This difference can have a positive impact on the bottom line for both handset manufacturers and service providers.

The study finds that owners who send and receive e-mail and text message alerts, take and send photos and videos or download music files on their mobile handsets have an average reported monthly service bill of US$77. This compares to a reported average monthly service bill of US$63 among owners who do not actively use these features on their cell phones. In addition, customers who most frequently use their cell phones for non-voice applications typically spend nearly twice as much for their current handset than do customers who do not use non-voice applications ($70 vs. $37, respectively).

"It's not surprising that handset manufacturers and service providers are offering more cell phones with advanced features in order to increase revenue," said Kirk Parsons, senior director of wireless services at J.D. Power and Associates. "Wireless monthly service fees and handset price points have increased as technologies and services have been added to phones, particularly those that include advanced features such as downloading and playing MP3 files or streaming video. For example, the average reported monthly wireless bill has increased $13 since 2005 to $73 in 2007."

The study also finds that photo applications -- taking, sending and receiving pictures -- are particularly popular among wireless owners, as 34 percent of customers report using this feature. This marks a considerable increase from 2005, when only 19 percent of wireless customers reported using photo applications. Speakerphone capabilities are also popular among customers, with 34 percent using this feature-up from 26 percent in 2005.

Other handset features that are most frequently used among wireless customers include: send/receive short text messages (26%); gaming (13%); Bluetooth capabilities (11%); download/use ringback tones (9%); picture messaging/e-mail (9%); surfing the Internet (8%); and instant messaging (8%).

"As cell phones become more complicated, it's going to be critical for handset manufacturers and wireless service providers to educate their customers on how to use these new services and features," said Parsons. "Making it easier for customers to learn how to operate specific products and services can increase satisfaction as well as promote future purchases of value-added products and accessories."

The study measures customer satisfaction with wireless handsets by examining five key factors. In order of importance, they are: physical design (24%); operation (22%); features (20%); handset durability (19%); and battery function (15%).

Sony Ericsson ranks highest in overall wireless customer satisfaction with a score of 741 points on a 1,000-point scale, performing particularly well in features and battery functionality. Sony Ericsson also receives the highest ratings from customers in operation and handset durability. Samsung (728) and Motorola (726) follow Sony Ericsson in the rankings.

The study finds that 40 percent of customers chose their wireless phone primarily due to the design and style of the handset. Other popular reasons for selecting a specific handset include: received for free (27%), easy to use (22%), discounted/reduced price (21%), small size (19%), digital camera features (15%) and variety of features offered (15%).

Volume 2 of the 2007 U.S. Wireless Mobile Phone Evaluation Study is based on experiences reported by 18,453 wireless users who have owned their current mobile phone for less than two years. The results are from the two most recent study reporting waves, which were conducted in April and July 2007.

Overall Satisfaction Scores (Based on a 1,000-point scale)

  • Sony Ericsson		741
  • Samsung			728
  • Motorola		726
  • Industry Average	723
  • Nokia			721
  • LG			719
  • Sanyo			716
  • UTStarcom (Audiovox)	693
  • Kyocera			692

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Tags: bluetooth  rcom  samsung  j.d. power and associates  text messages  battery  instant messaging  ringback tones  j.d. power  text message  mp3