Operators Must 'Squeeze' Late Wireless Adopters: Study

Late wireless adopters aren't as lucrative as earlier adopters, so wireless operators must work harder to squeeze profits out of them, a new study says.
Wireless operators will have to squeeze profits out of first-time subscribers in order to remain profitable, according to a study released Monday by Bear, Stearns & Co. and Compete, Inc.

That's because first-time wireless subscribers won't be as lucrative for wireless operators as long-time subscribers, the study indicated.

"In this study we found that new adopters of wireless services will generate less revenue than experienced subscribers," Adam Guy, director of Compete's wireless practice, said in a statement. "Understanding the unique characteristics of these late adopters will be key to focusing on squeezing profits out of new customers."

The safety that carrying a phone provides is the top priority of first-time subscribers, the study said. That priority reported by about half the 1,200 respondents in a study conducted by the research firms. In addition, this group is motivated by connecting to their families. So-called family plans are one strong way to appeal to this group, according to the study.

The study notes that new marketing tactics are required by wireless operators as the nature of their customers changes.

"As the industry's 'acquisition' stage winds down, carriers will need to fundamentally shift from 'hunting' new subscribers to 'farming' their existing subscriber base," Philip Cusick, wireless telecommunications services analyst with Bear Stearns, said in a statement.