Analyst Angle: Tweens, Teens and Other Assorted Nightmares

Editor’s Note: Welcome to our Monday feature, Analyst Angle. We’ve collected a group of the industry’s leading analysts to give their outlook on the hot topics in the wireless industry. In the coming weeks look for columns from Current Analysis’ Avi Greengart, Compete’s Miro Kazakoff and Jupiter Research’s Julie Ask.
Before you get the impression that I do not like kids, I do. I love my kids-they are funny, entertaining, intelligent people who will contribute much to society. That is my plan anyway. But between now and then, there is a small gap called the “teenage years.” This is the period when most of my friends (with teens) start pulling their hair out or start eating vast quantities of ice cream to calm their frustrations. And they all say, “This is what you have coming.” Thanks.
As I point out to my tween daughter when she comments on all my grey hairs, I did not have any until she was born. But at least I still have hair and most of my sanity.
I have been thinking more about tweens and teens recently since we just completed the survey for our Tween-Teen multiclient study. We originally did this research in 2005 and were asked to update it for 2007. This year, we surveyed over 1,200 parents, collected data on their 2,400 kids and also spoke to just over 1,000 children, all between the ages of 5 and 17 years. We are now in the process of pulling together the final project deliverables.
Aside from asking the parents and children about their current and future use of cellphones, we also asked who was responsible for making various purchase decisions (for the handset, accessories and the rate plan), and who is responsible for various the costs associated with the cellphone and the monthly charges. While the parents are highly involved in the purchase decision (as you would expect) and are more than likely to pick up the initial handset purchase, we were very surprised to find that few children pay some or all of the monthly cost of the cellular service.
For example, just over 50 percent of the 11 year olds in the survey had their own cellphone and about 95 percent of these children did not pay anything for the monthly service. Given the limited earning potential of a 5th grader, this is understandable.
But by age 17, when four-fifths have their own phone, less than 40 percent contributed to the monthly cost, including one quarter who paid the entire bill. This means that while the vast majority of 17 year olds have their own phone, the majority also get it for free. Obviously, the average 17 year old is capable of earning money if needed-they are certainly welcome to come and mow my lawn.
I find this interesting since I suspect (and know from personal experience) that kids will argue that they need the cellphone to keep in touch with their parents- “But Mom, I have the phone to call YOU.” A valid argument that lasts about 30 seconds until they send their first text message to a friend. And a quick survey of friends with driving teens shows that most teens contribute to the cost of running a car, either for gas, purchase cost, insurance or all three. Interesting how the kids pay for the privilege of driving but not for using a cellphone.
Looking at the data, I think there are a few reasons that the older teens are not contributing more:
1, Most got the phone when they were in their early teens. Kids are getting phones at increasingly early ages when they have no income and are therefore limited in their ability to offset the cost.
2, As already discussed, the parents think the phone is for the child to contact them and for safety. Hence, there is less of a feeling of needing the child to contribute to the cost.
3, The majority of child phones are added to a family rate plan and hence the child shares the parent’s minutes.
4, Cellphones are seen increasingly as “inevitable.” They are less seen as a luxury (by many, certainly not all) and more as a necessity. And since the child no longer asks for a phone in their room, the cellphone is seen as a replacement.
Now those of you reading this with teens with phones are going to start thinking about if your child pays, if they should, and how much. Some of you are thinking that they should pay something or more. Assuming that your teen will freak out when you bring up the subject, please do not tell them it was me who gave you the idea. I am enjoying my last years of teen-free parenthood.
Questions or comments about this column? Please e-mail Iain at iain@igr-inc.com or RCR Wireless News at rcrwebhelp@crain.com.