The UK Mobile Phone Industry - Delivering Value to the Student Segment of the Market (2005)

According to Mintel, Network providers are not making enough profit as predicted. This is due to the decline in monthly subscriptions while at the same time, sales of pre-pay is on the increase. The only way they can gain more profit is by increasing their monthly subscription and retain those customers and the existing ones. At the moment there are more pre-pay customers than monthly subscribers. By targeting students early, these students are prone to stay loyal ounce they leave university and start working and earning a lot more money. Banks use these practices and eventually when students leave university and start working, the first thing they do is pay off their overdrafts and according to Mintel report on Youth Lifestyle these students do not change Banks. Network providers should use the same tactics. The mobile phones market at the moment is becoming saturated therefore there are very little room for growth. There is soon going to be a fierce competition between the network providers to increase their market shares. We need to understand the issues and the reasons for the decline in monthly subscriptions, the best way to do this is to research the market for mobile phones and see what choices are available for consumers. Maybe students are not an attractive segment for the network providers. Pre-pay tariffs are designed for those who do not want to commit to a whole year monthly subscription and students are included in that target group simply because they are considered to be poor and unable to afford the bills. The research could find out whether or not students are actually only buying pre-pay. If students are not buying prepay and instead opting for monthly subscriptions, perhaps the network service providers should consider targeting students.