‘Double down on data’ to bring in young consumers

‘Double down on data’ to bring in young consumers

Operators need to bet the house on data if they are to snare teens and twentysomethings. A new report from Analysys Mason has revealed that young people overwhelmingly look for ‘more data’ in their next smartphone plans. More than one in three 18-24 year olds would choose more megabytes over more minutes when they are signing their next contract. This is much greater than voice or text, with 20% of teens and young people saying that they would prefer more talk time.

With the widespread launch of 4G just months away, the report underlined how critical data is to the future of operators. EE has predicted mobile internet usage will leap by 750% during the next three years and contracts are likely to change to reflect how data will dominate in the years to come. Operators have started to do so already; Three has offered unlimited data for some time and EE, O2 and Vodafone have each tweaked their tariffs to up data levels. For Three, the benefits are clear in how it has acquired social networking consumers during the past few years. For the other three, the theory is that a greater chunk of data, whether it is through EE’s 4G proposition, Vodafone Red or O2’s On and On, means a happier consumer and less money spent on retention when they come to the end of their contract.

Relegation Risk

Stephen Sale, principal analyst for voice and messaging at Analysys Mason and the report’s author, said: ‘This report’s results indicate that an operator’s next-generation communication strategies need to be much more focused on segmentation, with commercial and technical decisions taking into account differentiation in various customer segments. If not, operators run the risk of becoming relegated to secondary providers of communication services for some user groups.’

Interestingly, while data use is surging, voice over internet protocol services such as Skype are still in limited use. While it has yet to hit the mass market, more than 10% of those under 35 use such a service. Sale said: ‘The low penetration rates of VoIP services favour operators, but they cannot afford to be complacent. Following on from Skype, Facebook and Google are making advances in this area, and Microsoft is also expected to make aggressive moves later this year. Operators must ensure they are proactive with changes to pricing structures and the core feature set.’

The report also revealed that the text message, which celebrated its 20th birthday last year, still has value [see box]. Among 18-34 year olds, 91% of them are texters, compared to the 53% of 18-24 year olds who use IP-based messaging services such as WhatsApp. While consumer affection for SMS will be encouraging to the industry, Sale said operators cannot rest on their laurels. He said: ‘Operators will note that despite the high penetration levels of IP-based alternatives, full messaging service substitution has not yet occurred. Operators should continue to embed the use of SMS in customers’ behavior, particularly with younger users, by offering unlimited messaging plans.’ 

While older consumers are still wedded to voice as the main reason for having a mobile, what operators can be sure of is the market will change even more quickly in the next five years than it has in the previous ten. Sale has warned operators will need to start planning now to ensure their adult customers of tomorrow are the teens of today.

Youths after simple messaging

UK youths are most interested in making sure their messages are seen, with 61% wanting a service promising immediate and guaranteed delivery.

A separate report from Acision found BlackBerry Messenger (BBM) is the most popular service among 18-25 year olds, with an average of 110 messages sent per week. SMS is the next most popular in the UK, with 74 messages sent weekly, then WhatsApp (74), followed by iMessage and Facebook Messenger (64 messages per week).

JF Sullivan, executive vice-president for product management and chief marketing officer at Acision, said: ‘Our research shows that over three quarters of users across both markets want a single messaging service that can reach everyone, and where the messages will follow them on any device to continue the conversation at any time, day or night. This is a clear message to mobile operators, who are best placed to fulfil this demand for better integrated messaging services. Only they can offer the ubiquity of service their customers are demanding.’

Written by Mobile Today
Mobile Today


Please wait...

Please write code to prove you're human