A serious, protracted economic crisis can result in changes in consumer behavior that persist after the end of the crisis. "Since mid-September, rapid, seismic changes in consumer behavior have created the most difficult climate we've ever seen," Best Buy CEO Brad Anderson said in
the thrid quarter of 2008.
And that is what executives in the telecom, wireless and video industries are watching intently these days.
People make what they think will be merely temporary adjustments in their consumption behavior but may discover that they like elements of their new consumption pattern. For some incumbents, this could reset demand curves.
For others, there is an unusual opening: a chance to take share on a permanent basis that did not exist prior to the recession. So far, there are few tangible signs of overt change, with one exception: prepaid wireless.
Incumbent telcos continue to see landline voice erosion, but that trend predated the recession and is not directly attributable to demand changes caused by the recession. Some recent surveys of consumer attitudes suggest a willingness to consider downgrades or termination of virtually any service, but service provider reporting so far does not show that attitudes have been followed by action.
New technologies and end use behaviors complicate the analysis. Much as the Telecommunications Act of 1996 aimed to change the nature of competition in the U.S. voice market, but largely was eclipsed by other simultanteous changes in IP technology and applications, so we might ultimately discover that the longer-term changes in other areas eclipse recession-driven effects.
Behavior might well change, but not because of the recession.
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