View full list of press releases
Joint Study by Bear Stearns Equity Research and Compete, Inc. Provides New Insight into Wireless Consumers
Safety Issues and Connecting with Family Cited as Key Motivators for Consumers Looking to Subscribe to Wireless Services
BOSTON, MA – February 28, 2005 -- A new study on wireless services released today by Compete, Inc., the leading predictive analytics firm and Bear, Stearns & Co. Inc. finds that while the U.S. wireless industry has room to grow, untapped market segments may not prove as lucrative as early adopter segments. This finding, based on consumer intentions to spend on average only $30 per month on wireless services, and other key motivators for potential and current wireless subscribers, are found in the report entitled "Characteristics of Wireless Subscribers and Non-Users".
"In this study we found that new adopters of wireless services will generate less revenue than experienced subscribers," said Adam Guy, director of Compete’s wireless practice. "Understanding the unique characteristics of these late adopters will be key to focusing on squeezing profits out of new customers," added Guy.
Compete and Bear Stearns surveyed over 1,200 consumers to gain insight into the different characteristics between wireless subscribers and consumers who don't currently have a mobile phone (non-users). The study assesses the growth potential of the wireless industry, not just in terms of interested new subscribers, but also in how much these subscribers intend to pay for wireless service.
Among the study's findings are:
- Potential Subscribers Care About Safety and Connecting. Safety reasons and family motivations are the primary drivers for consideration among non-users who think that they will adopt wireless sometime in the future. Safety and emergencies account for half the reasons non-users want to get a wireless service and family and friend considerations were cited 19 percent of the time.
- Addressing Potential Subscribers. Creativity around business plans and service offerings will be needed to reach many customers in the non-user base. Carriers have recently emphasized hybrid plans over traditional prepaid, addressing lower end customers but also leaving room for upward migration of service usage. The study finds that family plans may be the best way to directly address many non-users and that carriers should leave true prepaid to the mobile virtual network operators (MVNOs), which have the capability to provide significant value in addressing the more economically sensitive potential subscriber.
- Current Subscribers Care About Network Quality and Pricing. Service pricing and network issues are seen as the most likely reason for customers to change service providers over time. Interestingly, the study found that the longer consumers had been wireless subscribers the less impact price had on their choice of providers. Experienced subscribers have learned that being able to get and maintain a signal when wanting to use the phone is worth some premium over the low-end network experience.
"As the industry's ‘acquisition’ stage winds down, carriers will need to fundamentally shift from ‘hunting’ new subscribers to ‘farming’ their existing subscriber base. Increasing the utility of wireless services and growing/deepening existing customer relationships will drive growth and success," said Philip Cusick, wireless telecommunications services analyst with Bear Stearns.
For more information, please contact Adam Guy, director of wireless services for Compete, at (703) 924-9692 or at aguy@compete.com. For a copy of the report, please visit http://www.compete.com/wireless.
Members of the press may also contact Monica Orbe at Bear Stearns at (212) 272-9294 or email morbe@bear.com.
About Compete, Inc.
Compete provides the earliest indication of actual consumer behavior available, which gives clients the information needed to improve the effectiveness of customer acquisition, servicing, cross-sell and retention. Compete has proven that online data on consumer behavior is a predictive indicator of total demand and purchase intent – both offline and online. Compete leverages its database of the daily behavior of more than 10 million online consumers to offer predictive analytics, which Compete's industry experts interpret to provide clear recommendations for action. Since launching its services Compete has provided major auto manufacturers, financial services companies and wireless carriers with a unique vantage point on their customers and competitors not previously available. For more information visit http://www.compete.com.
About Bear, Stearns & Co. Inc.
Founded in 1923, Bear, Stearns & Co. Inc. is a leading investment banking and securities trading and brokerage firm, and the major subsidiary of The Bear Stearns Companies Inc. (NYSE:BSC). With approximately $46.1 billion in total capital, Bear Stearns serves governments, corporations, institutions and individuals worldwide. The company's business includes corporate finance and mergers and acquisitions, institutional equities and fixed income sales and trading, securities research, private client services, derivatives, foreign exchange and futures sales and trading, asset management and custody services. Through Bear, Stearns Securities Corp., it offers financing, securities lending, clearing and technology solutions to hedge funds, broker-dealers and investment advisors. Headquartered in New York City, the company has approximately 11,000 employees worldwide. For additional information about Bear Stearns, please visit the firm’s website at http://www.bearstearns.com.