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Why the Us Hispanic Market Is Important to Wireless Companies

Essay by   •  December 2, 2012  •  Research Paper  •  1,396 Words (6 Pages)  •  817 Views

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Introduction

Why the US Hispanic Market is Important to Wireless Companies

The cell phone industry in the US has seen major growth in recent years. Cell phones, in a matter of years, have gone from being classified as a luxury item to something that is commonplace. In fact, the majority of adult Americans own cell phones. This rapid growth has set the stage for massive wireless companies to offer their products and services to those that wish for it. And wish for it they do.

The wireless industry has company when it comes to growth. The US Hispanic population has seen a significant spike in recent years and along with it Hispanic buying power has increased. At around $1 trillion, the US Hispanic market is larger than all but 14 countries in the world. It is the fastest growing market in the US and is expected to have buying power of $1.5 trillion by 2015. That will make Hispanics account for about 11% of the nation's wealth. This makes for a market that is too large and financially relevant for any nationally successful wireless company to ignore. If such deep pockets are not enough of an enticement for marketers, the fact that Hispanics have an affinity for wireless products and services makes turning a blind eye impossible.

Hispanics use many wireless and cellphone features more than any other group in the US. The numbers point to a Hispanic appreciation of the products and services offered by wireless carriers. Some facts about the Hispanic cellphone and wireless consumer are:

 US Hispanic wireless bills are about 10% higher than the national average. (Carriers Court Hispanic Market (Wireless Week), 2004)

 Hispanics are 24% more likely to spend over $150 on their monthly cellphone bill than other cellphone users. (Carriers Court Hispanic Market (Wireless Week), 2004)

 They are 22% percent more likely to switch wireless carriers within a year than all other wireless customers. (Benezra, 2004)

 45% of Hispanic wireless customers own smart phones (app based, internet connected phones) compared to the national average of 31%. (Kellogg, 2011)

 22% of Hispanic wireless users download or listen to music with their wireless device compared to the national average of 15%. (Hispanics are Important Mobile Marketing Targets, 2010)

 19% of Hispanic cellular users play games on their device versus 15% of all users. (Hispanics are Important Mobile Marketing Targets, 2010)

 12% of Hispanic wireless subscribers access social networks on their wireless devices compared to 10% of all users. (Hispanics are Important Mobile Marketing Targets, 2010)

There are reasons that Hispanics use wireless phones more than other Americans. First, and perhaps most obvious, is the use of cellphones to call friends and relatives in other states, countries, and even continents. Since a large portion of US Hispanics entered the country as immigrants, most have people they wish to speak with abroad. Hispanics are more likely than others to subscribe to wireless phone service exclusively so land line phones are less likely to be used to make the phone calls (Young, 2005). Also factoring in to Hispanic wireless use is the lack of computers in Hispanic homes. *****FIND AND INSERT SOURCE HERE***** Because they are less likely to have readily available internet access at home, more value is placed on internet access via wireless device.

The wireless phone industry is dominated by 4 companies. Verizon is the largest and holds 31.3% of themarket. It is followed by closely by AT&T, who at this time is organizing a possible buyout of T-Mobile which would make it the nation's largest wireless carrier. Until then, T-Mobile holds the 3rd spot and Sprint rounds out the top 4. There are numerous other wireless providers but the "Big 4" hold a combined 82% of the industry market share (Chart: U.S. wireless market share). For that reason, the focus of this report will be on these top companies.

Company Focus

A Closer Look at How Wireless Companies are Targeting Hispanics

This section will focus on individuals companies and reveal what steps they are taking in targeting the Hispanic market.

Verizon Communications

On

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