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Technology

Power play

Young people shaping cellphone landscape

March 21, 2007

Getting and holding kids' attention can be a challenge. Keeping them entertained might be described as a herculean task. But that's the proposition facing cellphone carriers as they seek to capture the youth market.

The contest to capitalize on the lucrative sector could soon lead to an explosion of new services and features available on cellphones in Canada, as new players enter the industry and existing ones seek to beef up their offerings, say industry experts and observers interviewed by CBC News Online.

While the service providers will be aided with the recent introduction of wireless number portability, the option to switch carriers and keep a cellphone number could be a double-edged sword — especially where fickle youth are concerned.

The potential for customer dissatisfaction or a perceived advantage held by one carrier over another might be enough to move some people from one competitor to another, but that possibility is amplified in the youth market, according to researcher Max Valiquette.

"As adults, we tend to act less on our frustration � than young people do," says Valiquette, president of Toronto-based market research firm Youthography Inc. "When you're a young person, when you have a bad experience with a product � you may not realize there are similarities with other products in the same category."

Customizing phone is key

What that means for the carriers is that they'll not only have to offer the best customer service, but they'll also have to deliver on the coolest features - the things that are most important to youth, says Valiquette: "Customization, entertainment and communication."

Those key categories include the ability to use text messaging and browse the web easily, get access to social networking sites such as MySpace and Facebook, and "anything that allows you to customize your phone," such as ringtones, screen wallpaper graphics and so on, he says.

The carriers' pursuit of young consumers will trigger a dramatic shift in the Canadian cellphone service landscape, according to Ken Wong, a business professor at Queen's University in Kingston, Ont.

"We're going to have a huge, huge crush for content, I believe," the marketing expert says.

He explains that when competitors lack a distinct technology advantage that sets them apart, the content becomes the key differentiator between similar services.

"Content starts to rule. It's like satellite radio," he says, pointing to the U.S. battle between former competitors XM and Sirius for the exclusive right to broadcast subscriber-getting personalities. "People signed up [with Sirius] for Howard Stern."

The notion that subscribers will flock to wherever the content they seek is found is something that youth-focused newcomer Amp'd Mobile Canada is betting on.

"I'd say there's no youth play at all in Canada," says Chris Houston, the company's president. "We're a mobile entertainment company more than we are a mobile phone provider."

The wholly owned subsidiary of U.S.-based Amp'd Mobile Inc. — which Houston co-founded — promises exclusive music, video, games and other multimedia offerings that include live streaming broadcasts from its in-house studio at the company's downtown Toronto headquarters.

Amp'd also boasts an exclusive lineup that ranges from recorded feeds by the MuchMusic channel, to content from the Ultimate Fighting Championship mixed martial arts league, satirical cartoon Lil' Bush - which has since been picked up for TV broadcast by Comedy Central - and an upcoming sports show by NHL veteran Luc Robitaille.

The competition already seems to be making Wong's prediction a reality.

'About laughter and music'

Virgin Mobile Canada has said it plans to introduce its own expanded and exclusive multimedia offerings, dubbed Virgin Mobile Live, that will draw from the global Virgin organization's content, and sports and entertainment partnerships through SportsNet and Star Daily celebrity news.

"For us, it's about laughter and music," says Nathan Rosenberg, chief marketing officer for Virgin Mobile Canada. "We have three cool-hunters trying to help us define what is interesting in mobile."

In addition to the trend spotters, the company enlists subscribers between ages 16 and 26 to participate in focus groups dubbed "V-panels," to find out directly what they want in a cellphone service.

Rogers Wireless also says it sees entertainment as a key to the youth market.

"If you look at we are doing right now, Rogers Wireless is focused on youth and what matters most to them - their friends and music through the latest phones with all the right stuff, such as a broad selection of MP3 phones, access to all the right content and applications," says Odette Coleman, manager of corporate communications for Rogers Wireless.

Coleman says phones with a large memory capacity to store content from the Rogers MusicStore and videos, as well as exclusive downloads like those offered during the soccer's FIFA World Cup in 2006, are all examples of the company's emphasis on the youth market.

But Valiquette says the competition to offer content is not the way to go to capture and keep young consumers, which makes the fight especially difficult for Amp'd as a new competitor trying to build its subscriber base.

"It's such a content-rich world out there that I think it will be difficult for Amp'd to make it a differentiator for them."

Valiquette argues that youth are bombarded with messages in a media-saturated world, and that even the promise of exclusively producing or offering content or features will have little impact on young consumers.

"YouTube doesn't produce its own content," he says. "Amp'd is going to have to do something incredibly special - the battle is unwinnable exclusively based on entertainment."

Cellphone has to look cool: researcher

So what will capture the youth market's imagination? According to Valiquette, the cellphone itself.

"Hardware is incredibly important," he says. "It has to look cool, feel durable, be small enough to carry easily but not be so small you can't use it."

That is reflected in the success Sony Ericsson has had with its music-focused phones sold through Rogers Wireless, the head of handset maker's Canadian operations says.

"It's important for carriers to introduce the right kinds of handsets and services," says Magnus Ahlqvist, general manager of Sony Ericsson Mobile Communications Canada.

"We've had a lot of success with our music phones," he adds.

Ahlqvist notes that because the company produces devices based only on the GSM wireless communications standard, that automatically created exclusivity for its products since Rogers operates the only GSM network in Canada.

"Having the most fully featured handset is cool. It's like having the best Nikes was a few years ago," says Wong. And young people's pursuits of the latest and greatest are aided by their willingness to experiment, he adds: "They're not afraid to spend money to explore new technology."

Handset lust is something the carriers are keenly aware of. Amp'd launched its service in Canada with Motorola Inc.'s worldwide best-selling RAZR, and plans to soon offer the Q, Motorola's answer to Research In Motion Ltd.'s BlackBerry and Palm Inc.'s Treo smartphones, which are increasingly incorporating multimedia functions.

Similarly, Rosenberg says the youth brand — which has typically offered lower-cost, fashion-focused phones in Canada — plans to add higher-end devices with a greater range of functionality later this year or early in 2008.

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