How Do You Sell Landline Voice to Consumers Who Do Not Want it?
How do you sell fixed network voice to consumers that do not really want to buy? It is a growing issue, as 52 percent of U.S. adult respondents live in households that are mobile-only, according to GfK MRI. In fact, 77 percent of Millennials do not buy fixed network voice service.
Basically, suppliers have to boost the value, cut the price, or do both. Fundamentally, that is what a bundle if all about (triple play, quadruple play or dual play).
Telcos and cable companies long ago concluded that bundles create value by price cutting. Consider what Verizon is doing as it introduces its new 750-Mbps symmetrical service. It sells standalone internet access for $150 a month. It sells a bundle including that same access, plus a full TV service and landline voice, for just $170 for the triple-play bundle. That’s a lot of extra value for $20 a month incremental spending.
There are other ways to spin the offer. You also can argue that many consumers face a choice that essentially boils down to “I want internet access and video, and will take the voice service if it essentially costs nothing.”
Some U.S. consumers have been doing so for years, buying triple plays when they really only want internet access and video, and then simply not using the voice line.
Other consumers have continued to justify the purchase of fixed line service because mobile service inside the home is occasionally or always flaky. That also might change, though, as voice supported by Wi-Fi access gains traction. That should eliminate many mobile network signal reception issues.
Some believe quadruple play bundles could explain regional differences in fixed line voice purchases. Others of us might argue the issue is really in-home signal reception, as bundles are available everywhere. There also could be other factors at work, including demography, as mobile-only behavior varies by age and ethnicity.
The Northeast has the smallest concentration of mobile-only households, at 39 percent. In other regions, levels of no-landline homes range from 53 percent (Midwest) to 57 percent (South).
GfK MRI data show that a full 57 percent of Northeast homes buy a bundle, compared to 49 percent in the South and even less elsewhere.
As often is the case, trends start with younger consumers, then gradually also are adopted by older consumers. The proportion of senior citizens (ages 65+) in mobile-only households quadrupled over the past six years to 23 percent, while the figure for Millennials (born from 1977 to 1994) climbed to 71 percent from 47 percent.
After Millennials, Generation X (born 1965 to 1976) is the age group most likely to live in mobile-only households, at 55 percent. Some 40 percent of Baby Boomer (born 1946 to 1964)households are mobile-only.
Among ethnic and racial groups, adults of Hispanic or Latino origin or descent have the highest incidence of mobile-only behavior, with 67 percent reporting cell-only status. Other groups have roughly 50 percent incidence, with Asian Americans at 54 percent; whites, 51 percent; and African Americans, 50 percent.