Interest in enhanced wireless outweighs usage

Yankee Group study shows untapped market for U.S. operators As enhanced services have grown into a prime source of incremental revenue for landline service providers, wireless operators have not enjoyed similar success convincing subscribers to buy additional services.

That doesn't mean wireless users aren't interested in enhanced services, though. According to The Yankee Group's 1997 Mobile User Survey, interest in enhanced services for wireless far outstrips actual penetration.

According to the study, 20% of wireless users are at least "somewhat interested" in wireless voice mail. In specific categories, those numbers are even higher. Among cellular users who also have pagers, 34% were at least "somewhat interested" in voice mail service. Some 27% of subscribers with cellular bills of $50 or more a month expressed interest in the service, and 22% of users who listed their occupations as salespeople said they are interested in voice mail service.

Voice mail, the most popular enhanced service among wireless users in terms of actual market penetration, is used by only 14% of wireless users, up from only 12% in 1996. Those numbers are in stark contrast to European and Asian usage of wireless voice mail service. For those regions, voice mail penetration averages about 40%.

Poor marketing of enhanced services by U.S. operators is a prime reason so few wireless subscribers use enhanced services, even if they're included in package deals, said Janet Constantin, senior analyst, wireless/mobile communications at The Yankee Group.

"A lot of people [who have the service as part of their cellular contract] don't know they have voice mail," Constantin said.

The lack of effort by carriers to get users into enhanced services stems from the fact that, until recently, the carriers could get by with just providing basic service.

But with the advent of personal communication services, which usually includes voice mail as part of a service bundle, wireless carriers everywhere are realizing that enhanced services may be the best way to attract and retain customers in an increasingly competitive market.

Constantin believes that while a couple of services with broader appeal will become the products that attract more wireless users to a wider range of enhanced services, most such services will be better suited to, and draw more interest from, high-volume wireless users.

"Voice mail and caller ID will heighten awareness [of enhanced services]," she said. "But where [carriers] will have the most success is targeting market segments.

The study bears that out. While a healthy 33% of the total survey sample expressed interest in caller ID, 41% of users with a cellular phone and a pager were interested in caller ID. Some 43% of users with cellular bills of $50 or more a month are interested in the service, and a whopping 46% of salespeople in the survey said they are interested in caller ID for their wireless phones.

Three-way calling generated the least interest among survey participants, but 11% of the total sample expressed interest in the service. When you consider that total penetration of all enhanced services combined is less than 5%, according to Constantin, it brings into perspective just how much of an untapped market exists for enhanced wireless services.

Constantin is working on forecast reports that will include revenue potential for the services, but "it's hard to determine revenue numbers at this point," she said.