Given the slowdown in the mobile phone market and ownership reaching saturation point across Western Europe, with only a five per cent growth in take-up over the past year, it is crucial that telecommunication companies look towards emerging telecoms markets such as China.
According to a recent e-MORI and Nokia Networks survey, China is expected to overtake the US in uptake of mobile phones by the end of the decade. Ownership of mobile phones in the UK in October was the same as it had been six months previously (77 per cent), with only five per cent growth in uptake over the past year (reaching 72 per cent in October 2001) according to the e-MORI Technology Tracker.
In contrast, the growth of mobile phone users in China has been phenomenal, and is predicted to reach more than 200 million users by December 2002. With an estimated 5 million new subscribers each month, there could be 300 million mobile phone users in China by 2005.
The first survey, conducted in the first quarter of 2002, of more than 1,600 non-users of mobile phones across four Chinese cities, confirms the enormous potential. Three in ten – 31 per cent – of non-users expect to be using a mobile regularly within 12 months. This represents almost 4 million new users in these cities alone.
The biggest hurdle to mobile phone usage in China and other markets is the lack of perceived need. Exploratory qualitative research reveals that mobile phones are thought to be beneficial to those with a “mobile” or busy life, but many non-users do not consider themselves to have this lifestyle. Cost is the other main obstacle (33 per cent), although some say they are waiting until tariffs are reduced (ten per cent). Given the recent international media coverage, perhaps surprising is that only one per cent mention health risks.
A separate survey of 1,650 people from the four main Chinese cities reveals that people with mobile phones rely on them heavily. Eight in ten agree with the statement “I feel I cannot live without my mobile telephone”, including 37 per cent who strongly agree.
Furthermore, the appeal of non-voice services is huge. Users were shown a list of 25 potential services that could be delivered by 2.5G and 3G networks and whether they would use them if they were available at an acceptable price. Some 85 per cent say they are likely to take up the services, which represents more than 6 million people from the four cities.
Market segmentation identifies three broad categories of mobile phone users – emergency users, loyalists and playful socialites.
Emergency users tend to be female, less well-educated and are either not working or in lower-paid jobs. They have only started using mobile phones recently and use them infrequently for emergencies or the occasional social call.This group is unlikely to be interested in cheaper calls and are therefore not very profitable to operators in the short term.
The other two categories – loyalists and playful socialites – offer far more potential. Both are price sensitive and any possible marketing strategy that includes a reduction in call charges could increase the use of phones and related services.
The loyalists consist of more mature consumers, with similar interests and more accessible needs. They tend to be 35to 44-year-olds, who are married and are heavy mobile users – in fact, for many, their mobile is their primary phone.
More fickle, but similarly lucrative in the short term, are the playful socialites. These comprise younger, white-collar customers, who have an outgoing, sociable lifestyle. They tend to be heavy internet users and are willing to pay a premium for non-voice services to operators that are prepared to meet their ever-changing needs.
While the three categories of users exhibit the common traits outlined above, there are some cityspecific characteristics that need to be considered when communicating with these groups. For instance, the playful socialite groups in two of the cities contain a significantly higher proportion of women.
It is also noteworthy that there are major differences in the size of the segments in each city that need to be taken into account when launching services. The playful socialite group ranges from 28 to 40 per cent of the mobile phone population (between 71,000 and 1.4 million), depending on the city.
While confirming the massive potential for mobile usage in China, the e-MORI/Nokia Networks research has provided some clear indications that quick wins and longer-term customer advocacy are there for the taking for those who are responsive to the varying requirements of different types of mobile phone users. Services and communications must reflect these key differences when tapping into regional nuances to maximise their potential impact and help operators to gain an advantage in this enormous market.