Communications Breakdown 2008 Telco Consumer Trends

Communications Breakdown 2008 Telco Consumer Trends

Nielsen Claritas tracked consumer behavior across a wide range of telecommunication products and services to identify this year’s key trends.

Cord Cutting Craze

Wireless/cellular only homes, which grew by 20% in 2008, now account for 18% of all U.S. households.  One-third of the wireless-only households have never had a landline, while the remaining two-thirds are cord cutters. Not surprisingly, cord-cutter households tend to be younger and are more likely to rent/lease their home.  Expect the wireless-only trend to grow, as homes continue to drop their landlines and young adults start new households with wireless phone service only.

Smartphone Surge

Both the Blackberry and the iPhone saw tremendous growth this year, reaching penetration rates of 6% and 2%, respectively.  The two wireless devices have attracted very different customers, however.  While the Blackberry appeals to a somewhat older, suburban consumer looking for a proven technology, the iPhone attracts a younger, urban consumer looking for the newest technology.

Mobile Media Malaise

Growth of cellular phones with streaming video or MP3 music players slowed in 2008, with penetration levels similar to those seen last year.  Among current owners, use of advanced services, such as streaming video and audio, decreased this year — a potential red flag.

Fiber Optic Future

Fiber optic TV grew at a measured pace, with penetration up 50% this year — from 2% in 2007 to 3% in 2008.  By comparison, cable and satellite usage was flat over the last year.  Look for dramatic future growth, with fiber optic TV penetration hitting 10% within the next two years and attracting an exceptionally affluent customer base.

Nielsen’s tip for telecom marketers: stress the value of your products.  Consumers will continue to seek out the latest “bells and whistles,” but they’ll be weighing the costs and the benefits more carefully than ever.

View Nielsen Claritas’s complete report.