Shifting from Adoption to Utilization and the Rise of Mobile Internet

Minnesota Broadband Task ForceSeptember 11, 2012

The Technology Adoption Curve

Roger’s Theory of Adoption

Are we approaching the end of the adoption curve?

Growth in the adoption of Internet users and broadband has been slowing in recent years. The leaps in residential adoption rates witnessed from 2003-2009 are now behind us.

Connect Minnesota reported that in 2011 73% of businesses subscribed to a broadband service – the same number reported in 2010.

As we move forward increases in broadband adoption will continue, but will be more a function of organic growth and less of function of intervention.

Accordingly, the focus going forward should be more on helping Minnesotans maximize their utilization of broadband and less on adoption.

Current Broadband Adoption Rate

Source: Pew Data -2011; Connect MN Data – 2011; CRPD Data – 2012Note: In 2011 the PEW Internet and American Life Project changed their method of measuring broadband. In 2010 they reported a national broadband adoption rate of 66%.

The Rise of Mobile InternetToday I am continually surprised as to how many business emails I receive originating from mobile devices. Below is a sample of the signatures in my email inbox from the last month:

Sent from my iPhone; Sent from my iPad; Sent from my Samsung Epic 4G; Sent from my Verizon Wireless Blackberry.

Can we afford to ignore this increasing part of the Internet landscape?

• 88% of American adults have adopted cell phones, with half being Internet-enabled.

• On September 5, 2012 the FCC announced the “Measuring Mobile America” program to assess mobile broadband performance.

Adoption of Mobile Internet*

* Definition of Mobile Internet for CRPD and PEW is a Smartphone; Uncertain of definition for Connect Minnesota

Is Mobile Internet an Equalizer?Percent of American Adults adopting Home Broadband

Source: Pew Internet and American Life Project, April 2012

Is Mobile Internet an Equalizer?Percent of American Adults Adopting a Smartphone

Source: Pew Internet and American Life Project, April 2012

Is Mobile Internet an Equalizer in MN?Percent of MN Adults Adopting Home Broadband

Source: Connect Minnesota, 2012

Is Mobile Internet an Equalizer in MN?Percent of Adult Minnesotans Adopting Mobile Internet

Source: Connect Minnesota, 2012

Are there Parallels with Telephony?

Over the past few years there has been a steady increase in the percentage of residential customers who choose to not maintain a landline and rely on solely on their mobile phone.

Will we find an increasing number of Internet customers moving in this direction as well?

Do we have to recognize mobile Internet service as having a significant share of the market?

Is it time for the Broadband Task Force to recognize mobile Internet service as broadband?

Minority populations are dropping their landlines or never subscribing

In their 2012 study the Center for Rural Policy and Development asked respondents “In addition to your cell phone, do you also have a landline telephone.”

Percent of Respondents reporting No:Hispanic: 80.2%Asian: 83.8%African American: 61.7%

The Big Question?

Is Mobile Internet fast enough to meet the broadband definition of the FCC and the goals of the Broadband Task Force?

Average connection speeds of 4G LTE in 15 metro markets

Source: Moore B. RootMetrics (2012) Gigaom.com

Feasibility and Barriers in Rural MN

• Rollout of 4G LTE is currently limited to metro markets, but the competition between carriers will change that.

• In 2010 Verizon Wireless established their LTE in Rural America initiative partnering with rural providers to extend and locally market 4G LTE with download speeds from 5 Mbps to 12 Mbps.

• Verizon Wireless also is marketing their “HomeFusion” product; a LTE home broadband product marketed as a “last mile” solution for residential customers out of range of DSL or cable providers.

•These initial efforts will certainly multiply as technology advances; all wireless carriers rollout their LTE product; and competition continues.

Feasibility and Barriers in Rural MN

• Price will continue to be a barrier in these areas. •The biggest barrier however may be the data caps that wireless providers currently utilize in their data plans, as customers that routinely download movies or perform other high-bandwidth functions may find the costs simply too high.

Two Take-Aways• Further increases in broadband adoption will

be limited as Minnesotans get closer to the end of the adoption curve. However organic growth will continue.

• Mobile broadband is already too diffused throughout the population for state and federal agencies to ignore; and should be integrated into our strategies to ensure ubiquitous access to broadband.