Mobile phone companies aim to tap booming teen market

Chicago, Nov 26: Teenagers, it seems, are always on the phone, but it’s still not enough for cell phone companies seeking to snag more young callers with prepaid plans in an effort to duplicate Europe’s success here.

Wireless telephone companies are scrambling for ways to add subscribers, and they see talkative teens as their next big market. Nearly half of the US population own cell phones, but proportionally, far fewer American teens have them, compared with their counterparts in countries across Europe and in Japan.

"People who are 16 to 24 right now are our future. Those are the people that are going to grow with us," said Brenda Raney, a spokeswoman for Verizon Wireless, the nation’s no. 1 wireless company. While many on Wall Street turn a sceptical eye to prepaid wireless plans because of high customer turnover and low revenue per user, they may be the perfect way to attract teens.

A tainted image may be part of the problem. US prepaid plans must overcome the blot of early marketing efforts aimed at customers who didn’t want to or were unable to commit to a monthly bill -- a group that attracted lower-income workers, some immigrants, even the occasional drug-dealer.

By contrast, the mainstream European mobile phone market has turned overwhelmingly into a prepaid one, which analysts say has helped drive wider usage across the continent. Up to 90 per cent of new mobile customers in European markets are prepaid. Prepaid attracts 85 per cent of Italian customers, 82 per cent of Portugal, 47 per cent in France and exactly half of Europe’s biggest market -- Germany. Verizon Wireless, for example, recently restructured its prepay program.

— Reuters