UK LTE usage leaps, as security concerns hold back mobile payments, report finds

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A quarter of UK consumers are on a 4G contract, a new report has claimed, also revealing security is the biggest barrier to mobile payments usage.

The wide-ranging report into the UK mobile market from Deloitte showed the number of consumers on an LTE contract has grown from eight percent to 25 percent in the last year. In total, 30 percent of smartphone users are on an LTE contract.

More than 32 million smartphones will be shipped in the UK this year, roughly one for every other person across the UK. Smartphone penetration was at 76 percent, up six percentage points on 2014 and 14 percent higher than in the previous year.

The report claimed consumers had an "obsession" with smart devices, with the nation collectively looking at their handsets more than one billion time each day.

Ed Marsden, Lead Telecoms Partner at Deloitte, said: “This is good news for mobile carriers and network operators. Faster connectivity should encourage greater data consumption. The telecommunications industry should constantly identify applications that can nurture higher demand for data.

“UK telecoms companies have copious data and information about their customers. However, the industry’s inertia around monetising this information has allowed a number of Silicon Valley giants to gain traction. It will be interesting to see whether UK telecoms companies will look to develop new revenue streams in the coming years as demand for connectivity continues to grow.”

[Read more - EE, Three stretching ahead of O2, Vodafone in UK market, Rootmetrics claims]

Figures from Ofcom from this summer revealed there were 23.6 million LTE subscriptions, up 20 million on 2014.

However, there was a mixed picture for mobile payments in the Deloitte report.

While the number of adults who used their mobile device to buy something rose from three to 13 percent in the year to May 2015, only one percent used their contactless handset daily.

The most common reason for not using a smartphone to pay was security, cited by 42 percent of respondents. Meanwhile, 35 percent did not see the benefit and 22 percent were lacking a specific app to pay.

Lee added: “As technology companies continue to launch and market their mobile-payment systems, smartphone users will increasingly accept it as a method of payment. Within the next year, we would expect around 10 percent of smartphone owners to regularly make mobile payments. Early adopters may choose to leave home without the need to carry a wallet or purse.

“However, for the mainstream consumer, it will be many years before credit cards are dispensed of entirely; cash’s anonymity may well mean it remains in circulation for generations.”

The report also revealed a decline in traditional voice usage among smartphone owners. Three years ago, almost all made at least one voice call per week. In 2015, a quarter of smartphone owners do not use their device to make a call.

The largest proportion of so-called "data exclusive" consumers are those aged between 18 and 24.