Report: Broadband Delivers Over $9,300 in Annual Savings to American Consumers

Move to Next-Generation Networks and Additional Spectrum for Mobile Services Will Help More American Families Achieve Internet-Enabled Cost Savings

Marketwired

WASHINGTON, DC--(Marketwired - Oct 29, 2013) - High-speed Internet -- and, increasingly, mobile broadband -- allow Americans to save an average of $9,363.85 a year on household spending, the Internet Innovation Alliance (IIA) today announced. Potential Internet-enabled savings increased nearly $500 from last year, along with a rise of 3.5 percent in average annual expenditures in 2012 reported by the U.S. Bureau of Labor Statistics.1 Authored by Nicholas J. Delgado, certified financial planner and principal of Chicago-based wealth management firm Dignitas, "Mobile Broadband and Money: Top 10 Ways to Save" is the fourth edition of the annual financial analysis. This year, the IIA-identified cost savings -- achieved by having access to and using broadband -- were calculated with the mobile consumer in mind.

"For several years, smart shoppers have been able to use high-speed Internet to save money through access to deeper inventory online and by sparing the gas and time burned shopping in brick-and-mortar stores," said Delgado. "But mobile technology is making money-saving strategies like price comparison and online coupons significantly more convenient and practical, because consumers no longer have to plan ahead to take advantage of them."

This holiday season, for example, most mobile device owners will enhance the gift-buying experience by utilizing their smartphones and tablets, according to a recent survey from Deloitte LLP.2 While shopping over the next couple months, smartphone and tablet owners will engage in the following mobile activities:

Mobile Activity   Smartphone Owner   Tablet Owner
Shop online   45%   69%
Compare prices   54%   58%
Use a store locator   56%   44%
Read customer reviews   44%   57%
Obtain product information   47%   58%
Make a purchase   31%   52%
Check product availability in-store and/or online   40%   47%
Search for and use coupons and discounts   36%   30%
Access social networks   29%   30%
Scan a bar code to obtain more information   32%   ---
Sign up for retailers' text messages for info & deals   24%   ---

"Whether for lean-back browsing or pocket portability, mobile innovations are being driven by consumer demand," said Bruce Mehlman, founding co-chairman of the IIA. "But in order for Americans to continue being able to tap into the power and convenience of wireless devices, policymakers must quickly make more spectrum available for commercial mobile services." 

Based on the 2012 Consumer Expenditure Survey released on September 10, 2013 by the U.S. Department of Labor, the latest analysis in IIA's Cost Campaign series once again investigated what the typical American family can save yearly on necessities like housing, food and clothing; basics including entertainment and travel; and every day services like bill pay through opportunities only available via the Internet. After figuring in the average annual cost of a mobile data plan ($690), the amount of savings a consumer unit can achieve by subscribing to and utilizing a mobile broadband connection comes to $8,673.85 -- that's more than one-sixth of average annual expenditures ($51,442).

The following savings are based on the average U.S. household income before taxes of $65,596. Of note, the percentage of savings that can be garnered with broadband increased over the past year for the entertainment (48.10% to 56.11%), housing (12.75% to 13.52%) and apparel (60.16% to 63.38%) categories.

Top 10: Potential Annual Savings Garnered by Fixed and Mobile Broadband

Category   Avg Spent/YR*   Avg Saved Due to Broadband/YR   % Savings
Entertainment   $5,283.00   $2,964.29   56.11%
Travel   $8,998.00   $1,799.60   20.00%
Housing   $13,687.00   $1,850.48   13.52%
Food   $3,921.00   $759.89   19.38%
Apparel   $1,736.00   $1,100.28   63.38%
Automotive   $30,748.00***   $500.00****   1.63%
Newspapers   $232.99**   $87.07   37.37%
Gasoline   $2,549.00   $141.98   5.57%
Non-Prescrip Drugs   $355.60**   $113.58   31.94%
Bill Pay   $46.68**   $46.68   100.00%

* Average spent annually, according to the Department of Labor Consumer Expenditure Survey
** Average spent annually, according to IIA calculations
*** One-time spending
**** One-time savings

As a percent of retail ecommerce sales, mcommerce reached record highs earlier this year. eMarketer expects that mobile's share of total US retail ecommerce sales will reach 16% in 2013.3 As for retail ecommerce holiday sales in the US, eMarketer projects a rise of about 15% again this year, matching last year's gains. For the full-year 2013, total US retail ecommerce sales are expected to reach $262.3 billion, growing by 16.4% during the year.

"Mobile devices make on-the-spot saving a reality, but they also make controlling impulse buying even more important," said IIA Co-Chair Jamal Simmons. "Overall, the return on investment in broadband access for consumers far outweighs the subscription costs."

Simmons added, "In order for more American families to be able to take advantage of the Internet as a savings tool, it's critical that policymakers pave the way for the nationwide build-out of next-generation networks."

For more information on the study's sources, methodology and a "Top 10 Ways Being Online Saves You Money" infographic that can be added to a website or blog, go to www.internetinnovation.org/savings. IIA's previous Cost Campaign analyses are archived at this link, as well.

About The Internet Innovation Alliance
The Internet Innovation Alliance was founded in 2004 and is a broad-based coalition supporting high-speed broadband availability and access for all Americans, including underserved and rural communities. It aims to ensure every American, regardless of race, income or geography, has access to this critical tool. The IIA seeks to promote public policies that leverage the power of entrepreneurs and the market to achieve universal broadband availability and adoption.

1 http://www.bls.gov/news.release/cesan.nr0.htm 
2 http://www.internetretailer.com/mobile/2013/10/24/mobile-devices-will-play-big-role-2013-holiday-shopping?list_type=cat&cat=e-retailers&ordered=1&index=5
3 http://www.emarketer.com/Article/Mobile-Devices-Boost-US-Holiday-Ecommerce-Sales-Growth/1010189

Contact:
For more information contact:
Lauren DuBois
(917) 573-2485
lauren@internetinnovation.org
View Comments (0)