Relationship calling plans lead to large mobile phone usage among young consumers; coverage and reliability trump newer capabilities.
Posted Nov 20, 2006
Family plans and prepaid options have succeeded in driving mobile phones to an increasing number of young U.S. consumers, according to a new Forrester Research report, "How U.S. Youth Use Mobile." About four-fifths (79 percent) of online 12-to-21-year-old U.S. consumers have their own phone today, according to the study. The trend is the most pronounced among college age consumers, with 85 percent of 18-to-21 year-olds possessing a mobile phone. The majority of these users have had a mobile phone for at least two years. Two thirds of those between ages 12 and 17 have a mobile phone, though 40 percent have had the devices for a year or less.
Fifty-four percent of young users are on a family plan, and 15 percent use a prepaid plan, but the latter could grow among younger users as more options for text messaging, photos and other advanced services continue to push up the bills, according to Jeff Kagan, an independent telecommunications analyst. "The prepaid arm is getting more attention as teenagers spend more on wireless services than parents imagine," Kagan says. "The teenagers who don't pay the bill pay no attention to the amount of wireless services they use."
Given a choice, these young consumers prefer to use their mobile phone and do so to the exclusion of traditional landline phones, according to Charles Golvin, Forrester Research principal analyst and author of the report.
Kagan agrees, pointing out that young consumers will often use the wireless devices even when they're at home, where a wired phone is also available. "Their friends will call them on the cell phone because that's the number they have," Kagan says. "So for many parents, prepaid plans are the best options. Parents don't want to give out blank checks."
Young consumers do more with their phones than simply make and receive calls. They are between three and four times more likely to send text or picture messages, download content, or access the mobile Internet than older consumers. According to Kagan, the portion of a bill for text messages is often higher than the voice portion of the bill. However, younger subscribers value core mobile service attributes like coverage and network reliability above new capabilities like high-speed networks and access to music.
Kagan adds that family plans were developed before these advanced services were available, so they were good deals for the consumers. "But now carriers need to develop more evolved plans to offer similar benefits with better control for the person who actually pays the bill."
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