01/06/2011

By Scott Thompson

M-commerce is set to be worth £19 billion by 2021, research reveals. At the same time, the research by Verdict on behalf of eBay warns that the market is currently being held back by unreliable mobile broadband.

UK retailers are missing out on at least £1.3 billion as a result of consumer frustrations with patchy coverage, unreliable connections and slow connection speeds. In a submission to Ofcom, eBay is calling on policy-makers to do more to address consumer frustrations when rules for the fourth generation (4G) of mobile networks are agreed later this year.

The research shows that 16 per cent of the UK is an “m-commerce not-spot”, where mobile spending is at least 20 per cent below the national average. Sparsely populated areas, such as the Scottish highlands and islands, rural Wales and rural counties of England are the worst affected. But the evidence also shows that mobile shopping is underperforming in certain heavily populated areas like central London, with broadband reliability and coverage acting as a brake on the potential mobile retail market.

More than a third of consumers have failed to complete a purchase on their mobile due to issues with mobile broadband. Although network coverage (79 per cent), reliability (85 per cent) and speed (86 per cent) of mobile internet connections rank highly as barriers to mobile shopping, consumers are also heavily put off by the cost of data (80 per cent). When asked their views on what should be the top priority for mobile networks and regulators, the cost of data came out top (over half), with improving coverage in rural areas in second place (23 per cent). One in ten think improving of the reliability of internet connections in urban areas (14 per cent) should be the priority, followed by providing better internet coverage on transport routes (13 per cent).

Angus McCarey, UK retail director for eBay UK, says: “Mobile shopping represents a massive opportunity not just for retailers, but for the economy as a whole. But our research shows that consumers and retailers are missing out as the cost and reliability of mobile broadband prevents shoppers from spending. High quality and reliable mobile broadband coverage throughout the UK has to be our ambition, giving consumers choice over when and how they shop, encouraging spending, thereby benefitting online and high street retail, and giving a much needed boost to the fragile economic recovery.”