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Telcos warned not to ignore older users
Thursday, May 30 2002
by Ciaran Buckley

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New research by telecoms analysis firm Probe warns that inattention to changing global demographics may prove disastrous for telecoms and their vendors.

According to the US-based company, Japan and several Western European countries are leading the world into a prolonged aging process, followed by the US and then by developing nations. The analysis is contained in its report, "Voice and Data Networks - The Next Ten Years".

Probe's report focuses on what will happen to carriers and networks as the average age of the world's population increases. It shows a total decline in the 0-19 age group of almost 12 percent for the US, Japan, India, China, Brazil, Indonesia and Mexico combined over the next 50 years, with no fluctuations in the 20-59 age group, which are generally the most productive work years. It also reveals a 250 percent total growth in the 60-plus age group in this same time period, which will have huge implications for the telecoms business.

The report suggests that the ageing process will eventually lead to a decline in population in these countries, and that telecoms that are solely focused on these markets will be left behind by those who have successfully targeted the developing world.

The report suggests that key industry players have been dismissive of products that are not focused on the youth market. This is because the youth market has driven much of the consumption and innovation in the consumer telecoms market, particularly in regards to innovations such as SMS, instant messaging and the Internet.

"We all know that the youth population, not the elderly, drives much of the consumption and certainly innovation in consumer telecom markets. Adoption of SMS, instant messaging, i-mode, the Internet in general and mobile testifies to their purchasing power," said the report's author, Allan Tumolillo. "This purchasing power, backed by a large and affluent adult population in Japan, the US and Europe, has propelled network expansion and certainly the stock valuations of vendors and carriers. The key issue is what happens to carriers and networks as the youth age cohort gradually diminishes around the world."

The report is released only weeks after Motorola moved to abandon its plain, but reliable, brand in favour of its new "Moto" image, backed by a sales and marketing push aimed in part at the youth market. Part of the campaign will see Motorola team up with MTV across Europe to help attract young mobile users.

Probe Research is a research and consulting group focused on telecom, IP and wireless and their related convergence issues.


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