Look Who’s in the Driver’s Seat Now: Gen “Y”erless (WP0007MD)

For ZDNet

Rebecca S. Diercks, (Peter Fabris) 12/11/00

Will Your Kids Soon Go Wireless?

Call them Generation “Y”erless. Children and young adults aged 10-24 may be the fastest-growing market for wireless voice and data services in the United States over the next several years, according to surveys by Cahners In-Stat Group. If you haven’t bought your kids cell phones already, wireless carriers think that you soon will.

U.S. wireless youth subscribers will number more than 43 million in 2004, up sharply from 11 million today, In-Stat forecasts. By 2004, half of U.S. youths will own a wireless phone and nearly three out of four will use one. Although this group represents a high credit risk to carriers, they actually have significant spending power with 10-17 year-olds alone spending $50 billion annually, In-Stat estimates.

To reduce the credit risk, carriers offer pre-paid services and family plans so that Gen Ys either pay in advance or put mom and dad on the hook for their wireless bills. Southwestern Bell Wireless, for example, offers several pre-pay cards between $10 and $100 and charges 30-60 cents per minute for calls. The company also has a FamilyTalk plan with unlimited calling among up to five family members and shared calling minutes, up to 750 minutes per month, priced between $40 and $120.

Carriers aim to lure new Gen Y wireless data subscribers with targeted content. AT&T’s Digital PocketNet service recently launched AT&T Surf Lounge, a collection of more than 60 sites including:

· MTV.com

· Sonicnet.com

· Bolt.com

· Indiqu.com

· Britannica.com

· Sweet16.com

These sites provide shopping, news, sports, entertainment, education, opinion polls and other types of youth-oriented content. Sprint PCS recently unveiled a gaming folder on Sprint PCS Wireless Web that has more than 27 games including some multi-player offerings. Sprint also offers two-way messaging in several forms including AOL’s Instant Messenger.

Carriers must work with cell phone manufacturers to offer a wide variety of wireless handset colors, forms, faceplates and accessories for this fashion-conscious crowd, says Rebecca S. Diercks, In-Stat’s director of wireless research. Since many parents will pay for phones and service, carriers should pitch the ability to communicate with their kids anywhere, anytime and tout safety benefits in their marketing, Diercks says, even though kids want the phones primarily for socializing.

U.S. carriers hope American youths will take to wireless services as enthusiastically as their counterparts in Japan where 60-70% of teens use wireless e-mail.