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Mounting Penetration of Internet Mobile Devices Drives Uptake of Mobile Tariff Subscriptions in Taiwan in First Quarter 2012

The first three months of this year saw a robust market for mobile subscriptions in Taiwan, according to recent findings by GfK Taiwan. Latest reports by the global leading market research company showed that voice only subscription plans still has a good take-up rate of 48 percent, followed closely by data and voice bundled subscription plans, which formed 46 percent of the total mobile tariff contracts pie. Data only plans had the lowest share of 6 percent.

Besides these termed postpaid contracts which formed the lion’s share of the total revenue earnings in the mobile tariff sector, a stabilized proportion of 5 percent were contributed by pre-paid cards.

“The popularity and widespread adoption of the latest mobile Internet devices such as smartphones and tablets have been directly fueling the rising take-up of mobile tariff plans, propelling the sector’s value worth in recent times to the highest it has ever been in the country,” noted Ms. Lydia Huang, General Manager of GfK Taiwan.

Tablets and smartphones correspondingly turned in strong first quarter performances. GfK’s retail audit findings reflected exponential volume growth of 159 and 206 percent respectively for these devices when compared to the same period last year.

“Mobile network operators have been fast in reacting to market trends, enticing their customers with attractive promotions such as the bundling of product with affordable monthly subscription plan,” commented Ms. Huang. “An emerging trend is the willingness of consumers to commit to a longer term contract in order to enjoy greater savings for their mobile device.”

For instance, while only 27 percent of subscribers in November 2011 chose to sign on a contract beyond the 2 year term, the proportion has been rising steadily over the next consecutive months to reach 43 percent in March this year.

GfK findings have also revealed that close to half (48%) of the contracts secured in first quarter were renewals–signifying a considerable level of satisfaction amongst subscribers with their current service provider. Meanwhile, 18 percent switched service provider, as shown by the porting of their existing mobile number over from the previous operator. This churn rate is relative high and indicates a high level of competition in the market for ownership of subscribers. The remaining 34 percent were new customers.

“As these popular mobile Internet devices continue to proliferate, the upsurge in consumers’ adoption and corresponding take up rate for mobile subscription plans will also climb substantially,” said Ms. Huang. “The value of the mobile subscription market will no doubt escalate further, leading to intensification of marketing efforts by the major mobile service operations to win the consumer dollar. Ultimately, the victorious player would need to have the ability to do both–constantly inject exciting promotions in the market to draw in new customers and have in place a loyalty program attractive enough to retain the existing ones,” Ms. Huang concluded.