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Wired, Wireless or Both? Americans Rethink Their Internet Connections

Almost 40% of Americans say they use their smartphone to access the Internet at home, according to a new survey by ReportLinker.

Like it or not, the Internet has become a necessity – as essential to daily living as water or electricity. Without it, it’s difficult to meet the basic needs for survival. For example, you need it to apply for a job, pay your bills, and communicate with friends and family.

And it’s about to be more tightly interwoven into the fabric of our lives – in some cases, quite literally. As the Internet of Things (IoT) arrives, we’ll be connected through what we wear, what we drive, and the appliances that help us with everyday household tasks.

All of which makes choosing how you connect to the Internet a pretty big deal.

As proof of the mounting importance of Internet connectivity, at last month’s Mobile World Congress in Barcelona, several telecommunications companies positioned themselves as leaders in the race to faster, more powerful connections. China’s ZTE Corp., Nokia and Verizon all indicated they’re working to be the first to offer 5th generation wireless networks – aka 5G.

The ubiquity of the Internet – it’s used by 88.5% of the U.S. population – has transformed our expectations for connecting at home and on the road. With smartphones, users can now surf the web anywhere, and this has chipped away at the dominance of cable broadband.

Today, even though half of Americans subscribe to Internet service through their cable company, many others are choosing alternative ways to connect. Almost 40% of Americans say they use their smartphone to access the Internet at home, according to a new survey by ReportLinker. In the same way mobile phones have replaced landlines, they appear to be poised to eradicate the wireless router.

It’s true the move to mobile Internet is accelerating. According to research conducted for the Commerce Department by the US Census Bureau, the number of U.S. households that are mobile-only has doubled, to 20% in 2015, from 10% in 2013.
Another sure sign broadband is on thin ice: 55% of the Millennial generation – including 60% of younger Millennials – are using their mobile to connect to the Internet at home, according to ReportLinker’s survey. By contrast, 69% of older generations prefer a broadband connection.

However, there are challenges with using just a smartphone to handle all your Internet needs, including reduced readability on small screens and the difficulty in submitting files and documents. That’s why smartphone-only users are more likely than those with home broadband to fill the gaps by using public library, school or community college Wi-Fi or computers.
Still, the trend toward mobile-only has captured the attention of mobile service providers, who once again are offering unlimited data plans. In February, Verizon, a notable holdout, finally gave in and began offering its own unlimited plan. But this could still be a hard sell for the mobile provider: 58% of connected users say they’re not interested in Verizon’s offer, according to ReportLinker.

While it’s possible these users are happy with their current home broadband provider, they may not be interested because they’re getting what they need from another wireless provider. Thirty-one percent of users told ReportLinker they’re already on an unlimited data plan.

Among mobile service providers, the most popular are Verizon (29%), AT&T (20%), T-Mobile (15%) and Sprint (12%), ReportLinker found. But smaller players, especially those offering no-contract plans are also well-liked. These include MetroPCS (owned by T-Mobile) and StraightTalk (sold by Wal-Mart).

In the broadband market, however, Comcast dominates by far, with 39% of Americans saying they subscribe to the provider. In the ReportLinker survey, just 9% of respondents said they subscribed to Charter Communications Inc., and another 9% said they had broadband from Cox Communications.

Yet Comcast’s hold could change quickly, especially as all players consider how to address a dynamic market. To secure its lead, for example, Comcast is looking for ways to enter the wireless market, while Verizon is contemplating acquiring Charter.
In the meantime, providers aggressively market package deals and tout their advantages to convince users to switch. ReportLinker found that more than one in five broadband users were persuaded by the package deal, which combines TV, Internet, and phone line. Nearly the same percentage said they chose broadband because they believed it was just much faster.

In some markets, however, there’s one very big reason users pick a specific broadband provider: It’s the only option. Unlike the market for mobile phone services, consumers often have less choice – or even no choice – of broadband services. Thirty-six percent of broadband subscribers say their current provider was the only option. Even in regions where there’s more than one provider, the choice is often limited to just two.

Among those who have the option of choosing between two providers, 29% said they made their decision based on the package deal. Almost one in four said price drove their decision, while 20% said it was reliability and coverage, according to the ReportLinker survey. By comparison, 30% of mobile Internet users say they’re more likely to choose a provider based on reliability and coverage.

The good news for broadband and mobile providers is that customer satisfaction is reasonably high, with 7 out of 10 respondents saying they’d recommend the service and 33% of promoters giving their providers a minimum of 9 out of 10 rating. However, the proportion of detractors is relatively high at 27%, which suggests that people are more likely to switch providers.

Comcast, for example, has the unfortunate distinction of being the most-hated company in America, according to 24/7 Wall St.’s annual rankings. And yet other providers aren’t far behind: DISH (#8), Sprint (#10), and Charter (#12) are not loved either.
There are several reasons for such low satisfaction. Thirty percent of detractors say they are dissatisfied with the high costs, while 19% say the services aren’t reliable, according to ReportLinker. Another 17% complain about low speeds.

Still, overall, 81% of Internet users say they’re satisfied with the reliability of their service, while two-thirds said they were happy with the price. Mobile internet users were more likely to be very satisfied (33%) with the pricing of their services, compared to those who had little or no choice of Internet providers in their region, 26% of whom said they were very dissatisfied.

As the number of options for Internet access continue to expand – and if 5G lives up to the promise of faster connectivity – it seems a good bet many dissatisfied users will adopt a mobile-only strategy. However, market consolidation could potentially change the playing field substantially, especially if providers combine capabilities to launch compelling new packages and products.

One thing is for certain: the Internet is a necessity, which means it’s a good line of business for both broadband and mobile providers.

 

This survey conducted by ReportLinker reached 500 online respondents representative of the US population, who were connected to the Internet at home. Interviews were conducted between February, 22nd and February, 27th 2017.