Log in
Your Local Ericsson site
  1. 2005 /

News Archive

Today's youth, tomorrow's mass-market

Technology is an enabler rather than a focus for today's youth. To them mobiles are more about lifestyle than applications. To the industry this means some rethinking as competition to reach the youngest clients increases.

June 22, 2005

According to the Wireless World Forum's report "Mobile Youth 2005 – your guide to successfully developing and marketing mobile products to youth" the mobile telecom industry still has plenty to learn. Even if youth are considered a technology friendly group as a whole, this does not mean they are in to everything. To them "killer applications," often decided by the industry, are not what make them spin. Rather, they choose the services that best satisfy their needs at the time and then spread them to friends, parents and their grannies.

 

The industry, therefore, can no longer see them as a big grey mass up to the age of 24; there are different drivers at different ages. To build success and prosperity on a long-term basis, and avoid an ageing customer base, operators have to start early.

 

Wireless World Forum divides youth into four groups, defined by both psychological and sociological changes that impact mobile usage: child (five to nine years old), early teen (10-14), late teen (15-19) and young adult (20-24). The key consumer drivers for these groups are, in order of importance as children mature, parents, emancipation, peer group reinforcement and status.

 

It is parents who supply most of the money for the youth market so it is surprising how little attention has been paid to the parent group. "Their support is vital to the long-term development of the sector because it is with parental approval that the longest relationships with the youngest of users can be developed by the industry," the Wireless World Forum report states.

 

According to Wireless World Forum, parents will sign-up nearly 85 percent of all new mobile phone subscriptions for people under 25 in Japan, the UK, the US and Germany. The investigation also says parents themselves prefer to be the ones who control, educate and get their children used to the mobile handset.

 

Still, paying close attention to these sub-groups and involving parents, is not enough for an operator to convince the market. With entry barriers lower than ever in most mobile markets, competition is only getting tougher. Operators need to focus on their core businesses rather than occupying the whole supply value chain from billing to marketing.

 

The trend of sub-leasing capacity from larger networks means a new mobile network brand can be established for about USD 100,000. These companies, called mobile virtual network operators (MVNOs), are often interested in "marginal markets" that are less profitable or difficult to reach. These days they are squarely looking at the youth segment.

 

Mobile operators therefore have two strategic options, according to Wireless World Forum:

 

Go wholesale and focus on fewer competencies – partner with MVNOs to target youth segments. Shore up data services to increase youth customer loyalty and create new successful Operator Branded Mobile Internet Services (OBMIS) such as VodafoneLive and DoCoMo's I-mode.

 

When it comes to 3G and youth, the recommendation from Wireless World Forum is to "Focus on those services that are popular already and look at how they can be better implemented across the 3G network," and repeats this motto to the industry when it comes to developing successful data services: "Focus less on technology and more on benefits of the service." In other words, know the customer even if they are young.