Subject: [NEXTEL-1] Wireless Firms Scramble to Snag Kids

From: Marcel <[email-masked]>
Date: Fri, 21 Feb 2003 12:21:32 -0500

http://www.thestreet.com/_yahoo/tech/kennethli/10070143.html

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Tech Stocks : Kenneth Li

Wireless Firms Scramble to Snag Kids

By Kenneth Li
Senior Writer

02/21/2003 11:40 AM EST

Click here for more stories by Kenneth Li

Children may be the future of wireless, if carriers have their way.
Verizon Wireless has rolled out a prepaid service aimed at young users, while AT&T Wireless
(AWE:NYSE - news - commentary - research - analysis) has launched a splashy ad campaign. Sprint PCS
(PCS:NYSE - news - commentary - research - analysis) and Nextel
(NXTL:Nasdaq - news - commentary - research - analysis) have designed special teen-friendly services as well.

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Yet in their quest to target the nation's youth, the carriers are finding that there's no clear-cut formula to snag young customers, and it remains to be seen whether efforts to do so will be lucrative.
"It's not a very attractive market when you're looking at it purely in terms of
[average revenue per user]
numbers," said Seamus McAteer, an analyst at technology research firm Zelos Group, of the youth market. "But if you're looking for areas of marginal growth ... it's more attractive."
While teen-agers often have cash on hand and spend an estimated $170 billion a year, according to last year's figures from Teenage Research, teens lack credit and are quick to drop providers. "The conventional wisdom is they will churn more and spend less money," said Thomas Weisel Partners telecom analyst Ned Zachar. Churn is the rate at which customers leave a service.
Nonetheless, the carriers forge ahead, as subscriber growth wanes and the companies scramble for new ways to snag users.
Around 38% to 43% of 18-to-24-year-olds use wireless services, compared with 53% in the adult group, according to telecom research firm Telephia. This year, carriers are aiming to drive that youth number up to 50%, according to tech research firm Zelos Group.
"This is the market of the future," said Thomas Weisel's Zachar.
While AT&T Wireless has yet to tailor specific programs to youths, its ads have targeted kids by touting the company's recently launched wireless multimedia services and messaging. "We think messaging continues to be the hottest wireless service with youth," said AT&T Wireless spokeswoman Susan Ramsey.

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