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Family planning
By LOUIS HAU Ike Chang's three kids kept nagging him for months to get them cell phones. Everyone at school has them. This way, you can keep tabs on us when we're out. Please, Dad, puhleeeese let us get cell phones too. Sound familiar? If so, you can probably guess the result: In a move that's played out with increasing frequency in households across the country, Chang relented in August and signed up his family for a wireless plan. The 47-year-old Tampa resident and distributor of health care products says the phones give him peace of mind. "I need to be able to communicate with my kids when they're out at night at the movies or at a friend's place," he says. The youngest in the family, 14-year-old Daniel, says he can live with that, especially when he considers all the times he needs to hail Mom and Dad. "Me and my friends go to a lot of places like theme parks or the mall," he says. "We don't carry change, so we can use our cell phones and call our parents for a ride." The U.S. wireless industry needs the boost from more families carrying phones. The business market has long been saturated. Most of the much-ballyhooed third-generation, or 3G, services aren't expected to debut for another year or two. And don't even ask about stock prices; publicly traded telecom companies are among the hardest hit in Wall Street's prolonged technology slump. Now the greatest potential for subscriber growth, industry experts agree, is the youth market. Wireless spending among teens and early twentysomethings "is not going to be on the same scale as a heavily traveling businessperson, but they do have a high degree of expendable income," says Ken Hyers, a wireless analyst at In-Stat/MDR, a technology consultancy in Newton, Mass. Wireless penetration rates among teens and adults are both about 45 percent, according to Roger Entner, program manager for wireless mobile services at the Yankee Group, a Boston technology consulting company. But 75 percent of those under age 20 are expected to have cell phones by the end of 2006, compared with about 68 percent among adults, Entner says. Wireless carriers are putting more marketing muscle behind prepaid plans. Why? Because unlike conventional postpaid plans that require one- or two-year contracts, you don't have to be 18 years old to sign up for prepaids. Family plans, under which members of a household share the same "bucket" of minutes and can often call each other for free, are also proliferating. Families like them because they get a consolidated bill at a more attractive price than with several individual plans. Not that America's teens and families are technological pathfinders when it comes to wireless usage. They lag far behind their counterparts in Europe and Asia, where wireless adoption rates among young consumers have long outpaced those among adults. That's partly because of the greater prevalence of prepaid plans outside the United States. And American teens are more likely to have their own fixed-line phones at home, giving them an alternative way of keeping in touch with friends that isn't readily available to kids in many overseas markets, says Andrew Cole, senior vice president for the wireless practice at Adventis Corp., a consultancy in Boston. "We're a very immature market here," Cole says. "Things are going to change dramatically in the next two to three years." Glimmerings of such changes are already evident. Verizon Wireless last month signed up R&B singer Tweet to promote its Freeup prepaid service. Cingular Wireless, which has a similar promotional partnership with rock group Sugar Ray, launched a Web site in April called ShoutOut (www.shoutout.cingular.com) for its young customers, featuring downloadable games and ring tones. Last week, Sprint PCS and Virgin Group kicked off the U.S. wireless market's most explicitly youth-oriented initiative yet. The two companies have teamed up as Virgin Mobile USA, a prepaid wireless service aimed squarely at customers under age 30. The service was rolled out June 23 in Sacramento, Calif., and Columbus, Ohio, and will go nationwide by the end of July. Everything about Virgin Mobile's service is tailored to a young person's sense of fun, right down to the names of the two Kyocera cell phones -- "the Party Animal" and "the Super Model" -- that customers can choose from. In addition to the usual text messaging and downloadable ring tones, the service allows customers to share music files with friends and features a "Rescue Ring." It allows the user to program his or her phone to ring at a predetermined time "to get you out of meetings, a bad date, whatever," Virgin Mobile spokeswoman Kristi Gates says. "We really see (the youth market) as virgin territory, no pun intended, because the market has been largely untapped," Gates says. "Most cellular providers haven't been successful in targeting this market because they haven't been customized." Whether or not Virgin Mobile succeeds, there will be plenty of people in the industry watching. Besides its exclusive focus on young consumers, Virgin Mobile is unique in that it represents a marriage of Sprint's wireless network with Virgin's brand-marketing muscle. If the formula works, more big brand names may try to affiliate with wireless networks, observers say. "It's going to be closely watched, not only by other cellular operators who haven't been so successful in the youth segment, but also among other brand marketers as well," says Charles Golvin, a senior telecom analyst with Forrester Research in San Francisco. Tampa Bay teens are among those who have joined the wireless boom. Haylee Smith, 14, of Seffner got a cell phone earlier this year. Now she can't imagine life without it. "If a movie's bad or a party's boring, we call and say, 'Mom, pick us up,' " she says. Smith's 13-year-old cousin Steffani Smith, also of Seffner, finally got a cell phone a few weeks ago, after softening up her dad with months of nagging. "It's cool," Steffani says with glee. "I guess you feel important. It's like a private area. Mom's not going to listen to what you're saying. . . . It makes you feel older." Haylee's mom, Cheryl Smith, says the biggest boon from being on a family wireless plan is being able to reach her kids at any time, especially considering that an older daughter at the University of Florida in Gainesville drives a 1993 Toyota Camry with 180,000 miles on it.
But parents quickly learn that the functionality of a cell phone is only a small part of its appeal to kids. Perhaps more than anything, they're a high-tech fashion accessory. That means more money spent on interchangeable face plates and covers, flashing batteries and antennas, hologram stickers and whatever else they can find at the mall. "You finally get them a phone, but then they say, 'I don't want this phone, I want the covers,' " Cheryl Smith says with mock exasperation. Haylee inherited a standard-issue black Motorola cell phone from her dad. Much to her chagrin, it doesn't accept interchangeable covers. "If this had a face plate, it'd be fine," she says during a recent visit to Brandon's Westfield Shoppingtown. "Why don't you just get some paint, honey?" her mom replies with a smile. The Chang family's cell phone plan adds its own element of parent-child discord.
Peter, Daniel and sister Sarah share two phones. Problem is, their dad deliberately chose a wireless plan that allows unlimited calling among the family's phones but only about 100 minutes a month of calling to other people. His logic? To instill thrift in his kids. "Later on, they're going to have their own phones," Ike Chang says. "This is the only time I can train them." While he appreciates his dad's concern, 18-year-old Peter could do with more minutes. "It's a leash," he says. But Dad proves to be a softy after all. With Peter about to attend Florida State University and Sarah entering her junior year at Sickles High School in Tampa, he's thinking of getting them their own phones with a more generous calling plan. Not having to share phones will be a relief to Peter. Ike Chang once had his older son's cell phone during a business trip, unbeknownst to a buddy of Peter's. "My friend called him up and said, 'Whaaazzzup?' " Peter recounts. "And my dad's like, 'What's this?' " -- Louis Hau can be reached at hau@sptimes or (813) 226-3404.
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