Carriers court students as classes begin

While Wall Street is in a slump and consumer confidence is flagging, wireless carriers say their sales still increased this year when students started to return to school.

The Redbook Retail Sale Average reported that consumer spending increased just 0.2% during the first two weeks of August, a popular school-shopping time. However small, it was still an increase, which pleases carriers.

“The youth segment has tremendous growth and we’ve been really successful in getting to it,” said Kit Hagen, Cincinnati Bell Wireless (www.cbwireless.com) senior marketing manager. “Back-to-school is a very large and successful period for our prepaid product.”

Because most postpaid wireless phones require contracts, credit checks and age limits, most carriers market their prepaid services to youths.

Alltel (www.alltel.com) launched a marketing campaign a few weeks ago strictly targeting college students returning to campus. The campaign includes a group of SUVs painted with their prepaid Boomerang (www.boomerangwireless.com)service logo that will visit collegiate hangouts.

“We have seen a greater interest in our product during the back-to-school period,” said Philip Junker, Alltel executive vice president of marketing. “We looked at our Boomerang customers and found users as young as 13 and 14.”

Many teenagers find wireless phones and devices cool and trendy, while parents think buying phones for their children will promote safety, Junker said.

AT&T Wireless (www.attwireless.com) spokeswoman Alexa Graf said sales to students, especially those in college, were a growing part of AT&T business.

“We recently made a deal with about 350 college bookstores to be a distribution point for our phones,” she said. “We’re seeing prepaid as a big solution for the college kids because they don’t have any credit.”

Graf said it was harder for AT&T to track sales to younger children because customers have to be 18 to buy any wireless service. Parents often buy phones for their teens, she said, but the records are in the parents’ names.

“I think parents are kind of torn,” Graf said. “They want to get their kids the phone for the safety and security aspect, but they’ve also got to have an understanding with their kids about proper use.” Herschel Shosteck, Shosteck Group (www.shosteckgroup.com) president, said wireless phone sales to children was interesting because carriers often don’t compete against each other for the business.

“Rather, they compete with McDonald’s, the Gap and Old Navy because the kid has a limited amount of funds,” he said. “Rather than buying fast food or clothes, they might buy phone service.”

John Byrne, Kagan World Media (www.kagan.com) wireless analyst, said that while sales do increase during the end of summer months, the blip couldn’t compare with other big sale periods.

“It’s certainly not any comparison with Christmas,” he said. “But, if you look at where there are more subscribers to be had, certainly one of the areas we have not hit very well is the youth market. You could do that with prepaid, but so far, nobody’s really done it that well.”