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Mobile Savvy Youth Changing the Telephone Game
Nowadays, it seems like young adults, teens, tweens and even all the way down to the kindergarten set have their own cell phones. For sure, the youth are quick adopters of the latest technology and the many applications that go with it. But more than an ease of communication, mobile phones also display status and individuality depending on the chosen handset and serve as a lifeline to young users.
Back in days past, it used to be the sneakers you had and the clothes you wore in school that were the envy of others, but while those status symbols still persist, electronic gadgets are the new basis for judgment. Now it is about the phone, the available features, such as a camera, video, keyboard, and other attractions. Mobile phone dependency is growing, with uses including everyday phone calls, texting, web surfing and multi-tasking applications for adults and kids alike.
Social networking has also rapidly expanded in part thanks to the frequent access via mobile applications. Facebook, MySpace, owned by News Corp. (NWSA) , FourSquare and other sites all have applications for use on smartphones, including Research in Motion’s (RIMM) Blackberry lineup and Apple’s (AAPL) iPhone, which allow members to post updates to their accounts while on the go. Younger users enjoy the constant connection to friends and acquaintances and the sharing of numerous everyday life details, however, more mature site subscribers may act more cautiously owing to privacy concerns.
The eager adoption of cell phone technology and usage may bring about other issues for the iGeneration. As youth become accustomed to instant gratification via email and text messaging, patience may come in short supply when dealing with non-wired life. In a study conducted by the Pew Research Center, some teens admitted to sleeping with phones by the bedside in case of a late night text or email, as well as skipping on sleep due to late night messaging. Face-to-face communication may take a backseat to virtual relationships or activities, hindering vital social skills.
Spiraling text and web usage has brought other demands to mobile providers. Service providers had to re-evaluate monthly plans to incorporate unlimited options when minute bucket plans and pay per text charge became unsatisfactory to users, in turn, intensifying an already heated price competition climate. That said, AT&T (T - Free Analyst Report) recently reversed its stance on unlimited data plans, doing away with the offering likely due to the rising tide of web surfing and the pressure to increase revenues. Too, consumers want updated handsets with enough power to run multiple applications, while the tween and above set want to dazzle their friends with the latest device. Providers need to have the right portfolio of handsets to draw subscribers as well as make continued investments to their wireless networks in order to support climbing web usage. Even the federal government has a hand in cell phone usage, by funding broadband networks for rural areas, which may include wireless service as well.
Despite the lofty price of the latest iPhone version, and the exclusive carrier agreement with AT&T, the smartphone remains a coveted choice with the younger group. Google (GOOG) entered into the mobile device fray, too, with the development of its Android operating system for smartphones. What’s more, the search engine giant also released its own device, Nexus One, limited to availability on Deutsche Telekom’s (DT) T-Mobile network after Verizon (VZ - Free Analyst Report) and Sprint Nextel (S) backed out of an agreement to support the device. However, the lukewarm reception and the entrance of several new 4G Android devices on the market prompted the company to exit the handset development business. Mobile phone manufacturer’s such as HTC, Motorola (MOT), Nokia (NOK) and others all are pressed to introduce new phones packed with more features in an appealing design regularly.
Many telecoms developed wireless networks as consumers pushed for expanded accessibility. Now calling alternatives, including cable and Voice over Internet Protocol, have become a factor in the trend of declining wireline accesses, as the younger generations quickly accept technological advances. Those telecoms that have not invested in mobile assets, such as regional giant Qwest (Q) have been adrift with declining revenues and an outdated business model. Telco giants AT&T and Verizon have transformed their businesses into a broader communications format as traditional wired voice lines become an increasingly smaller part of their business. In fact, Verizon recently sold wireline assets in 14 states to rural telecom provider Frontier Communications (FTR). Rural telecom services have been one bright spot in fixed-line services as widespread calling choices have been slower to arrive.
Some within the current crop of youngsters may never even use a land line phone at home. During the recent recession many households pared expenses and phone usage came under the knife. Traditional wired accesses have been on a downward slope for several years, however, some seized the opportunity to become strictly mobile households. With budgets pressed, many would likely sooner cut in other areas than on mobile connectivity.
It’s no doubt that mobile phones are a way of life for many users. Youth, in particular, are enthusiastic users of the services and driving subscriber and usage growth. But they are also playing a large role in the strategic direction of telecoms, with many of the industry participants focused on wireless subscribers, enhanced networks and other offerings. In order for the industry to continue to grow and prosper, providers need to ensure they receive the youth message loud and clear.