High-profile nationwide carriers and niche-focused mobile virtual network operators are not the only wireless service providers that stand to benefit from specific marketing geared toward the highly desirable youth market. A survey released last week by the National Telecommunications Cooperative Association and the Foundation for Rural Service found that young people living in rural markets are a potential gold mine for regional carriers.
The third annual Rural Youth Survey on Telecom Usage found that 86 percent of young adults between the ages of 18 and 24 and living in rural communities said they have their own wireless phone, which NTCA noted was much higher than estimates for the youth market nationwide. The survey also found that 20 percent of those questioned said they rarely use a landline phone when calling from their home, which was an increase from 13 percent in 2003, and that 14 percent indicated that they make all of their calls from home using a wireless device.
NTCA wireless industry analyst Athena Platis noted the higher than average reliance on wireless service by youth in rural markets was due to a number of factors including the dispersed nature of rural communities, typically longer distances that are traveled to go to school or sporting events and a steady decline of payphones in small communities.
Of those youths that said they currently had a wireless phone, 60 percent said their parents provided the funds for the device, which Platis noted could play into the favor of carriers with a well-established local presence. With parents playing such an important role in wireless choices for their children, NTCA suggested rural carriers would be well served to direct part of their marketing of youth-focused services through the older generation by playing up the safety and convenience of wireless communications.
“Young people might be attracted to the glitz, but parents want more of a local name and presence instead of the big faceless, nationwide carriers,” said Athena Platis, wireless industry analyst at NTCA. “The cell phone is a safety tool, not just a toy.”
In addition, NTCA said rural carriers could further strengthen their local presence through partnerships with driving schools for high-school teens and with local universities for students heading off to college. Nextel Partners Inc., which provides service in small- and mid-sized markets across the country, announced such a deal last year with Morrisville State College in New York, distributing more than 1,700 handsets to incoming and returning students living in residence halls to replace the previously available landline service.
The NTCA survey also noted that only 5 percent of youths in rural markets are currently signed-up for prepaid wireless plans, indicating the common perception that non-contract offerings are more appealing to younger subscribers is not valid in rural markets. A more broad-based youth survey conducted by the Yankee Group earlier this year found 14 percent of young adults across the country said they used prepaid wireless services.
Young adults also showed an increasing interest in free night and weekend calling options being offered by carriers compared with last year’s survey, while interest in free long distance and roaming actually dropped, which Platis said could prove to be to the benefit of rural operators.
“This is good for rural carriers as they can give away local night and weekend calling instead of long distance,” Platis noted. “It also plays up their local strengths.”
Similar to the general wireless market, the NTCA survey found that voice is still the “killer application” among rural youths with 98 percent of those surveyed indicating they use their wireless phone most often for voice calls. While wireless data services remained only a small portion of overall usage, the survey noted interest in and usage of basic wireless data services including text messaging did increase year-over-year with 30 percent of those surveyed saying they used SMS services at least sometimes, compared with only 19 percent in 2003.
In an attempt to spur further wireless data usage, a number of rural carriers have begun to aggressively highlight wireless data platforms for their local customers, including an announcement between Rural Cellular Corp. and Midwest Wireless that will allow Rural Cellular customers to access BREW-based services while on Midwest Wireless’ CDMA network. Similar BREW initiatives have been announced by a number of regional providers including Alltel Corp., U.S. Cellular Corp., Western Wireless Corp. and Leap Wireless International Inc.
In addition to the immediate financial benefits of attracting younger wireless customers, NTCA said the deployment of advanced services could help many small communities battle “rural brain drain” that has seen many young adults move to more technologically advanced urban areas.
“It is imperative that rural businesses are equipped with the resources to provide high-level service that is comparable to their urban counterparts,” explained Bruce Bohnsack, president of FRS and manager of Germantown Telephone Co. in New York. “The lure of city life is strong for most youth, but if rural businesses are able to offer product offerings that meet their needs and provide them with the same services that they seek from urban areas, then hopefully, we can prevent the loss of such a valuable work force.”
