First up, an introduction from Graham Brown of the Wireless World Forum:

Children don't know the rules we set for them; this is why they defy convention. SMS grew thanks to young people "breaking the rules". MMS was an attempt to increase per-message fees. Some real views from youth follow, highlighting social value of mobiles for youth (duh).

Lifetime value of a young mobile customer in the UK is $20,000. This decreases as they get older. We need to connect with them earlier because this is when they build up their brand associations (catch 'em whilst they're young!). Lots of quite complicated graphs. Lost revenue through churn is far more of a revenue opportunity than increasing ARPU incrementally: mobile telecomms runs at double the churn rate of the typical service industry.

Comments

[Anders Borg]

It's hard to (or not) break rules when there are none.

It's like young ones and PCs. To them PCs have always existed, and if we talk really young ones, MySpace has always existed, etc. It's part of their environment.

Interestingly MMS is no longer expensive. I pay 0 between 3 (as in Three) users and $0.2 for cross-network users. So why is it not used more? A major reason is that texting is way more important than sending photos etc, and then SMS is used by default even when MMS is there (as it's more expensive and less "obvious" than SMS). Writing a text message in MMS is clearly less user-friendly than for SMS (more steps). Most phones also say "Picture message" or similar, so it's outright obvious MMS should not be used for text messages.

I doubt very much that $20k is a realistic figure, as mobile telephony will become more or less free in due time. Information service revenue will increase though, as subscriptions turn to flatrate.