US needs to open up mobile networks, says study

Natalie Apostolou
17 Sep 2009

As the US Federal Communications Commission begins a review of the level of innovation in the wireless sector, a new report suggests that the mobile industry should be deregulated, invite open network policies and be open to the influence of foreign carriers.

The Brookings Institution said in a study investigating mobile markets in the US, UK, Spain and Japan that public policy heavily impacts consumer behavior.

“By evaluating how consumers feel in places with different characteristics, we see how

government policies affect consumer behavior and how policy changes might affect the commercial marketplace,” the report says.

It said the Japanese market was relatively closed, had not deregulated and did not make it easy for foreign companies to operate.

“Its telecommunications network has relatively high consumer prices and low levels of cell phone innovation,” the report concluded.

By comparison, it said Spain’s high rate of mobile app consumption was due to an open architecture set by government’s telecom policies. Not only does Spain enjoy the highest rate of mobile app downloads but also the greatest willingness to pay more for new mobile phone features.

“When you give people more choices, they are willing to pay more because they see the value of their personal investment,” the report said.

US consumers were more interested in choosing their own mobile applications than other markets, but they download fewer apps than others because of software incompatibilities and service provider restrictions.

It said the most frequent reasons for not downloading new cell phone applications were lack of interest, cost, or not being able to do so on their phones.

In other findings; the most popular new cellphone features are games, local directories to locate businesses and restaurants, music and chat and instant messaging.

Just under half of all Americans - 48.9% - say they are likely to switch from landlines to cell phones and 48.1% say when that they are taking a short trip, they are more likely to take their cell hone than a laptop.

Spain is the market where consumers are most likely to see mobile phones as an extension of personal computers.

In all four markets, being able to chat and make cheap international calls are the most popular mobile features. In the US the most common frustrations are the length of service contracts, roaming charges, cost of domestic calls, and the lack of desired features.

The US has the highest utilization rates among the four nations of smart phones and PDAs.

“With the number of applications rising dramatically, this project suggests a ‘win/win’ potential for the wireless industry. Both large and small service providers could do well under policies leading to more widespread consumer usage,” West says.

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