Brought to you by Wireless Intelligence
Primary research commissioned by Wireless Intelligence shows that North American consumers are spending more on mobile, countering perceptions that the economic situation has led to a slowdown in spending in the sector.
The study on multiple connections per user shows how consumer behaviour is having a real impact on penetration and ARPU and reveals a different picture to the ‘per-connection’ values reported by operators today. A mobile connection is defined as either an active SIM card or a unique mobile phone number in markets where SIM cards are not used.
In USA and Canada, results of the research show that the average consumer holds 1.3 cellular connections in Q3 2009. This means that real market penetration in the region stands at 71% compared to the reported figure of 92%. So whilst reported average revenue per connection appears to be falling year-on-year, average revenue per user is in fact increasing, which means that North American consumers are still spending more on mobile but spreading their spending across multiple connections. Our study reveals that real average revenue per user in North America has increased from USD 60 to almost USD 64 since 2006.
As expected, the research supported the fact that the vast majority of consumers in the USA are on contract or postpaid schemes; yet within this group, 22% of customers own more than one mobile connection. Furthermore over one-third of consumers over 60 years old own more than one contract connection, significantly higher than teens or consumers in their 20s. Underpinning this finding is the reported success of family plans which, in most cases, allow users to activate up to five lines on a 2 year monthly plan and share preferential minute rates between lines.
In the USA, the 30s consumer segment has the highest propensity towards owning multiple prepaid mobile connections. 43% of people aged in their 30s own more than one prepaid mobile connection which is on average three times higher than teens and consumers aged over 50 years old. It is interesting to note that 32% of female prepay users own more than one connection which is twice as much as male users. Overall, women tend to own more mobile connections than men with 30% and 25% respectively. The trend is the same when we look at the ownership of multiple mobile devices rather than just connections, with 32% of women owning more than one mobile device against 24% of men. In contrast, the trend is the exact opposite in Canada where men tend to own more mobile connections and devices than women.
In the USA, 28% of teens actively use more than one mobile device on a regular basis, but only 12% of them own more than one mobile connection. They also tend to have more connections on prepaid than on contract. As both parents and marketers will already know, this trend reflects that teens are more likely to be interested in the device itself rather than a voice plan. Other age groups show a more balanced relationship between multiple mobile connections and devices’ ownership with consumers in the 30s and 40s segments reporting the highest rates. In Canada, this trend is even more pronounced as the 30s and 40s outweigh by far any other age groups in terms on contract and prepay multiple mobile connections ownership.
Joss Gillet, Senior Analyst, Wireless Intelligence:
The results of our study in North America reflect that there is still room for growth in the region unlike in Western Europe where we have found that user saturation has been reached. Consumers in the USA or Canada have not been decreasing their spend on mobile, counter to expectations brought by the global economic downturn. Currency fluctuations caused by the recession, however, have strongly impacted mobile operators’ financial performance over the past few quarters. From a consumer segmentation perspective, teens and seniors, whilst showing high penetration levels, still offer opportunities in what were once considered niche markets. Obvious examples would be services linked to consumer needs such as parental control, localisation and accessibility. Yet such services remain fragmented in the current ecosystem and mainstream solutions are still to be introduced to consumers. We believe that the need for dedicated solutions for each consumer segment remain critical to success in many saturated markets and are where mobile operators need to target value-added services. Mobile marketing has yet to go beyond voice-centric plans to address the needs of consumers in specific niches. This process will force mobile operators to create dedicated devices and services (including mobile applications), and is sure to increase the number of partnerships with content providers and vendors and radicalise legacy business models.