Could Consumer Communications Spending Quadruple?

By Gary Kim September 26, 2012

How much can consumer spending on communications, including mobility services, broadband and other services continue to grow, as a percentage of total household spending? The answer to that question could well determine the health of the global telecom business.

And there are clear indications that household spending on a range of communications services and appliances has been growing over the past couple of decades. In fact, a spending rate below three percent was the norm until the recent Internet and mobile era.


Image via Shutterstock

In part, you might argue, that it is logical. People now are buying multiple services (broadband access, video entertainment, mobile telephone service, fixed telephone service) where in the past they were only buying a single service, namely fixed network telephone service.

There also are some potential indications that overall spending on devices and services is reaching unprecedented levels.

U.K. household spending on communications, broadly defined, are as high as 12 percent of total household spending, some say. That figure seems unprecedented and out of line with historic percentages in most markets. If such levels can be reached, then there is room for overall spending on devices and services to more than double.

In fact, the U.K. government data seems to suggest that U.K. households spend between three percent and four percent of income on communications. That is entirely consistent with past spending patterns, and nowhere near the 12 percent level some believe is the case.

In the U.S. market, household communications and information technology spending has recently been in the five percent of spending range. That includes both “communications” subscriptions and devices such as computers and other “office” technology.

There are clear indications that consumers are spending a greater percentage of their disposable income on mobile services, in particular.

U.S. consumer spending on phone services rose more than four percent in 2011, the fastest rate since 2005, according to Department of Labor statistics.

Families with more than one smartphone sometimes pay more for mobile service than they pay for cable TV and home Internet access.

But it is not clear that the 12 percent figure is accurate, in the United Kingdom or anywhere else.




Edited by Brooke Neuman

Contributing Editor

SHARE THIS ARTICLE
Related Articles

Rest Your Weary Fingers: Voice Activation is Coming to a CRM Near You

By: Special Guest    8/9/2017

We spend a lot of time talking to our gadgets these days. Whether we're seeking directions from Siri or weather updates from Alexa, speech is quickly …

Read More

Kevin Kennedy Stepping Down, Will New Leadership Help Guide Avaya Back into Prominence?

By: Erik Linask    8/7/2017

After more than eight years as Avaya's chief executive, Kevin Kennedy will be stepping down from that role as of October 1, 2017. He'll be replaced by…

Read More

Micro-CT Scans Allow Researchers to Study Live Insects in 3D

By: Kayla Matthews    8/7/2017

The things we don't know about the natural world could fill textbooks. That's why excitement is the most appropriate response when we discover new way…

Read More

Gogo Making Air Travel More Productive

By: Erik Linask    8/4/2017

Gogo created tremendous hype when it first enabled in-flight connectivity on American Airlines, back in 2008. But, anyone who has used in-flight Wi-Fi…

Read More

Can We Run Out of Internet?

By: Special Guest    8/3/2017

As little as ten years ago, you couldn't discover new things like you can today. Whether you consider this to be a curse or a blessing, the content av…

Read More