While the digital divide holds out hope of shrinking in the next half decade, signs persist that vendors and operators have yet to come to grips with the special needs of the burgeoning numbers of minority users.
Two new studies reflect the optimism and obstacles among Asians, Hispanics and blacks in the trip to a wireless future.
According to a study by analyst firm The Insight Research Corp., the spending rate by ethnic groups in the United States on wireless services, as well as on local, long-distance and Internet services, is growing faster than the general population. The report says the groups will spend $41 billion on telecom services, including wireless, by the end of this year, representing 30 percent of the consumer market place.
By 2005, says the study, ethnic consumers will purchase more than $65 billion of telecom services, including wireless, which will swallow half of the expenditure.
The report notes that Asian and Hispanic groups will increase spending by more than 13 percent each year through 2005, compared with 10 percent growth in the general consumer population.
The study, “Telecom and Ethnic Groups: Uses of local, long distance and wireless in ethnic communities,” recommends that service providers are cognizant of in-language, in-culture advertising, customer service and billing as part of their strategy for success in the future.
“Multi-lingual customer service representatives and in-language online bills are ethnic strategies telecom companies have recently adopted,” says Robert Rosenberg, president of Insight, emphasizing that mere language translation is not enough. “You must utilize symbols, colors and images consistent with the values of the ethnic communities you want to reach.”
One of the keys to the rise in the number of the ethnic users is that the communities continue to grow faster than the general population with an increasing purchasing power, according to the study.
In 1999, the purchasing power of African-Americans, Hispanics and Asians was about a trillion dollars. Spending by Hispanics, identified as the fastest growing of the groups, is expected to exceed $450 billion in 2001. Asians, who make up the smallest percentage of the groups, are identified by the report to be more educated and affluent than the other groups.
Insight’s research also revealed that 36 percent of ethnic respondents were foreign born and about 30 percent spoke a language other than English at home.
Another study, conducted by Context-Based Research Group, concludes that the wireless industry is far away from its potential owing to cultural differences, difficulty learning to use devices and inadequate emphasis on the social advantages of the technology.
In interviews and photo essays with 180 participants in nine cities in the United States, China, Japan, Sweden, France and England, Context observed wireless users in action, examined their expectations and how the technology has changed behavior in certain groups. Researchers also interacted with non-wireless users and investigated how wireless service is advertised and communicated in the media.
“While everybody is talking wireless, our findings suggest that no one has truly figured out what consumers really want and fully tapped into the opportunities wireless presents,” says Context’s principal anthropologist Robbie Blinkoff, adding that what consumers want is simplified devices and promises that are not exaggerated.
The report observes that wireless marketing and product design do not reflect different consumer behavior in different parts of the world, creating a gap between usage and what the device can do.
The study identifies the tendency of manufacturers to design wireless devices and applications for business with less focus on social use.
“Non-users across the globe are mystified by wireless ads and other messages, making them reluctant to buy into wireless,” says the study, adding that SMS services should be the first step toward greater wireless adoption in the United States.
In line with closing the digital divide in the business arena, iCommuniate Holdings Inc. selected CeKA Technologies Inc. to link government procurement with minority and disadvantaged vendors to compete online with larger firms for agency IT purchases.
