Wireless carriers looking to increase market share and generate interest in advanced services should continue to focus on the youth market, which according to a consumer survey released by the Yankee Group last week, has proven to be fertile ground for the adoption of new services, including text messaging and advanced handsets, as well as an opportunity for wireless carriers to lure customers away from wireline services.
The survey’s findings, which were part of the Yankee Group’s 2003 Mobile User Survey, noted that young adults between the ages of 11 and 24 are extremely technology savvy, have a greater awareness level and interest in advanced services and can be a significant influence on packaging options, including family plans. The Yankee Group noted these values lead to a prime selling opportunity for carriers.
“Younger adults are less jaded than more mature market segments,” said Linda Barrabee, senior wireless analyst at the Yankee Group. “The segment is a keep-or-lose opportunity for carriers.”
While often considered a high-risk market segment due to credit and contract requirements, the Yankee Group survey found that 56 percent of teenagers below the age of 18 own or use a cellular phone, including 20 percent of pre-teens. With sometimes questionable income sources, 55 percent of teens and pre-teens admitted that their parents paid all of their bills, which the survey found average $45 per month.
Advancing up the age scale, the survey found that young adults between the ages of 18 and 24 reported an average wireless phone bill of $55 per month with more than 80 percent covering the charges themselves.
The survey also found that while only one-third of teens had any influence on the purchase of wireless service, advanced services and handset selection ranked second behind service pricing as the reason for their decision. Service pricing was also a strong influence on young adults, with 58 percent of those surveyed claiming reduced service pricing would increase their loyalty to a carrier.
Barrabee added that carriers continue to feed consumers’ desire for searching out the lowest-priced service.
“Carriers have been unable to differentiate themselves and have continued to resort to pricing in an attempt to attract customers,” Barrabee said.
The survey also noted that the youth market spent an average of $70 on wireless devices, which was significantly more than the $45 average for older adult segments. In addition, 30 percent of young adults said they spent in excess of $100 on their wireless device, which was slightly more than the 29 percent who said they paid nothing.
The survey also highlighted the tech-savvy nature of the youth markets. More than 60 percent of young adults and more than 50 percent of teens and pre-teens said they had text-messaging capabilities on their handsets, compared with less than 30 percent for older adult market segments.
While teens and pre-teens lagged behind the young adult market in access to text-messaging services, the survey found that active teen and pre-teen text messaging users sent more than 50 messages per month compared with approximately 30 text messages for young adult users.
“Text messaging is an ideal feature and can be leveraged to penetrate the data market,” Barrabee added.
The survey also found that the youth market uses wireless service in more fixed locations than more mature markets, which the Yankee Group linked to a greater percentage of young adults cutting the cord on wireline services and relying exclusively on wireless service. The survey noted that 12 percent of young adults rely exclusively on wireless service compared with 4 percent for users over the age of 24, and that 36 percent of young adults have “significantly replaced their landline telephone usage with wireless.”
