Mobile Youth – Mobile operators must tune into youth market
A paradox is haunting the mobile industry, the paradox of disloyalty among mobile youth. Mobile youth, who represent a $130bn (£68.6m) market, love their mobiles more than food and, in extreme cases, more than their parents. In 2005 they spent eight times more on their mobiles than on music.
Yet these very same mobile youngsters treat their service providers with a disloyalty bordering on promiscuity. Every year the major mobile networks in the UK – O2, Orange, T-Mobile and Vodafone – lose… well over a third of their youth subscribers to rival networks, totalling $1.8bn (£949m) in lost revenues. Churn, as customers switch between services, is a reality that sets many operator hands wringing, and rates of youth churn in mobile are the highest for any service industry in the UK.
Furthermore, youngsters simply don’t warm to every service that operators pitch at them. Mobile is rife with examples of hyped-up ‘killer apps’ and ‘next big things’ that fall into the chasm instead of crossing it. MMS picture messaging and 3G are two examples, with projected MMS revenues for 2006 over five times higher than actual revenues and 3G attaining only a fraction (11%) of expected 2007 take-up among the youth market (50%). The first mobile TV-enabled handset in Europe, the Samsung P900, had much lower adoption rates among youth than the technically inferior Motorola V3.
Is mobile youth simply too fickle to be worth bothering about? At Wireless World Forum, we don’t think so. These apparently skewed take-up patterns can be explained by peer pressure, which overrules youngsters’ desire to adopt products and services that fall outside their group’s parameters of experience.
Until they’re young adults (aged 20-24), consumers make mobile purchases based on group belonging rather than displays of individuality. Young users want mobile technology that delivers not ‘cool’ features and applications but social benefits that enhance the value of their peer group interaction – for example, mobile music services that allow them to share playlists or services, such as Boost Mobile’s Loopt, which lets people find nearby friends using GPS. This is a point that mainstream operators haven’t quite grasped; they’re providing a social service and not a mass-produced utility. For youth, mobile is much more than the airwaves which carry it.
Network operators should watch and learn from powerful brands outside of mobile that have established a loyal and profitable youth consumer base. Companies like Nike and Procter & Gamble understand how to give youth markets social value by encouraging their input into product development, becoming involved in sporting or musical events relevant to youngsters and creating communities around their respective brands. Operators of the world need to wake up and realise that they have everything to lose by ignoring their young subscribers.
