American Consumers Not Connecting with 3G Mobile Phone Technology.

Consumers Want Advanced Mobile Phone Functionality But Don't Associate it with 3G

NEW YORK -- New findings from the TNS Global Technology Insights (GTI) 2006 study, which examines cutting-edge technology issues across key markets, indicates that American consumers, like their global counterparts, haven't fully grasped the advantages of Third Generation (3G) mobile handsets. 3G mobile phones support high data speeds, always-on data access, and greater voice capacity, enabling consumers to use their mobile phones more interactively and for a wider range of applications, including transmitting voice and data simultaneously.

In the U.S. and around the world, more consumers than ever before have 3G phones. However, they do not seem to be associating the applications they want to use with the capabilities that 3G enables. In the U.S., 16 percent of mobile phone users have handsets with 3G technology, but only ten percent of those users make use of the 3G functionality. Globally, 20 percent of consumers have 3G capabilities, with only nine percent of users taking advantage of the enhanced service.

The study reports that U.S. consumers, when compared to consumers around the world, are more likely to look for mobile phones with features such as a still camera (42 percent versus 35 percent), mobile Internet (19 percent versus 12 percent), email (22 percent versus 12 percent), and mobile gaming (13 percent versus 7 percent) when making their next phone purchase. However, consumers don't seem to understand that 3G phones provide technology that allows them to use more advanced versions of these features. "It's similar to the evolution from dial-up Internet to cable modems or DSL. It took consumers a period of time to understand how much faster they could access the Internet with cable and DSL compared to their dial-up modems," said Don Ryan, Vice President of Technology and Media at TNS. Ryan added that as mobile phone users become more comfortable with 3G technology, they will use it more often. This interest points to opportunities for service providers to educate consumers about the versatility that 3G technology can offer.

Cost appears to be the greatest barrier to broader adoption of 3G technology. Americans are more likely than their global counterparts to consider cost as a barrier to adopting advanced services. The study found that other factors, such as network speed, battery life, screen size, image quality and memory can also be obstacles for many services, but their impact pales in comparison to that of cost.

Despite these barriers, directional research shows that Americans have the highest usage rates of on-line gambling and on-line shopping services of consumers in any country. TNS asked users who have adopted mobile phone services how often they accessed these services. Generally, 40 to 50 percent of U.S. consumers who use mobile TV, electronic banking, on-line gaming, location services and subscription services use them daily. This compares to 20 to 25 percent daily usage for the rest of the world.

These services can be categorized generally as "mobile commerce" and "mobile entertainment." Both are still in the very early stages of development. Today, three to five percent of mobile phone users in the United States deploy various mobile commerce services, with an additional ten to twelve percent expected to adopt them in the next one to two years. Less than five percent of American consumers currently use mobile TV services, including real time TV access and downloading entertainment programs and sports. An additional ten percent of consumers are expected to start using those services in the next one to two years. The recent federal government decision to ban credit card usage at online casinos may reduce the use of mobile phone gambling services in the future.

"These trends point to the U.S. developing a strong foundation among early mobile Internet adopters for ecommerce and entertainment services. This use of the mobile internet among early adopters seems to be paralleling the more advanced uses of the Internet itself today," said Ryan.

Note to editors:

About the Global Technology Insight study

GTI 2006 surveyed 16,000 consumers in 29 countries during August 2006 to provide key insights into mobile content and applications, future technologies, brand power, co-branding and convergence. The U.S. component of the study included approximately 1,000 consumers.

About TNS:

TNS is a market information group:

* The world's largest provider of custom research and analysis

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TNS operates across a global network in over 70 countries, allowing us to provide internationally consistent, up-to-the-minute and high quality information and analysis.

The group's employees deliver innovative thinking and excellent service to local and multi-national clients worldwide. In the custom business, they combine in-depth sector knowledge with expertise in the areas of new product development, positioning and segmentation research, brand and advertising research and stakeholder management.

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