Dear Editor:
I always appreciate the timely articles on market trends in RCR. Last week, I couldn’t help but notice two very important cover stories-one on the teenage market and one on Sprint PCS’s revised fall quarter projections. I hope you don’t mind if I comment on them.
Wrong numbers, hard questions
First, I find it ironic that telecom investors-people who live and die by the telephone-are so prone to getting wrong numbers-the wrong market numbers, that is.
For the past four years, we at Technology Trends have pointed out to investors and marketers that increasing quarterly new subscriber numbers-what carriers’ stock prices have thrived on-are the wrong numbers to judge carriers by. The real issue carriers like Sprint PCS face is not how they can add more subscribers, but how they can actually keep the subscribers they’ve got.
It is time to ask Sprint PCS and others some hard questions. While those carriers seem to be filling their subscriber buckets at an incredible rate, how many holes are in the bottom of those buckets? Are their buckets so rickety that the subscribers pass right through? Are there so many cracks in the floor that net gains are actually becoming much smaller than we thought?
Everyone seems to fall head-over-heels in love with carriers like Sprint PCS that perennially report massive subscriber additions, but my money is on the handful of smart carriers who know how to keep customers happy; who are slowly but surely adding more subscribers to their wonderful, water-tight buckets. I’ll take the $45 monthly ARPU customer who does not churn over a $69 customer who churns every 18 months any day of the week.
Investors, beware of getting the wrong numbers. Ask companies like Sprint PCS the hard questions. Never mind how many subscribers they’ve added this quarter. How many have they managed to keep? And what are they doing to reduce churn? Competing on price is not going to get it done.
Teenage market
RCR Wireless News did a fantastic job addressing the lucrative but tricky teenage market (What do teens want? and Targeting teens, Sept. 25 issue). With rare exceptions, it seems that wireless providers have struck out almost every time they have stepped up to the plate to take a swing at the teenage market.
You put it very well: “If corporate America thinks it knows what cool is, think again. A room full of suits who can’t figure out why their daughters love Britney Spears has little chance of developing the next wireless killer app for teenagers.” How right can that be! Teenagers don’t care about “killer apps” or price points. They care about …
Well, that’s the trick, isn’t it?
I firmly believe that the answer to connecting to the teenage market has to do with understanding them better. Hats off to Senior Writer Antony Bruno for talking to a researcher for the article. If you want to connect with teenagers, you must be willing to listen to them. The sooner wireless marketers learn to listen to teenagers by spending the time and money up-front in research, the sooner we’ll see a breakthrough in that market.
Technology Trends has long endorsed research projects that help carriers listen to special markets, including teenagers. We’re glad a few providers are starting to get the message.
C. Hunt Eggleston
President and CEO
Technology Trends
