Mobile Youth in the Developing World

A recent series of studies by mobileYouth reveals that mobile penetration among youth aged 20-29 has surpassed 100% in various developing regions. Across the planet, youth will spend $350bn on mobile technology this year -- ten times the size of the global recorded music industry. This growth is spearheaded by the developing world, where the mobile youth market will grow 25 times faster than that of the United States and Europe by 2012.

A look at specific developing countries helps break down this enormous market:

In Pakistan penetration reached 100% in 2008 among people aged 25-29, with the 20-24 demographic following suit a year later. One mobileYouth study predicts that, with current mobile penetration rates, phone and service revenues from Pakistani youth will reach $1.6bn by next year, with youth consuming $533 million of data in 2012 alone. In nearby China, 250 million youth own mobile phones, leading analysts to expect $14.6bn of data usage by young Chinese citizens in 2012.

But among all the Asian developing countries, India is emerging as the mobile youth superpower, with total mobile activations surpassing China’s by the end of this year. By 2011 one in five of the world’s young mobile users will be Indian -- roughly equal to the entire U.S. population. Leading the mobile adoption charge are young Indians in rural areas, a 100 million-strong group valued at two billion dollars.

In Kenya, some ten million mobile youth owners will create $800 million in revenue in 2010. Mobile penetration surpassed 100% within the 25-29 age group in 2009, with 20-24 year-olds expected to cross that milestone in 2011. Two-thirds of all mobile users in the country fall within the 20-25 age group.

It’s clear that young people are driving the mobile revolution in the developing world, but what’s driving these astounding adoption rates? One reason worth mentioning (by no means is it the only one) is the ever-increasing price war waged by mobile operators in developing countries. In an endless battle to combat “youth churn” (30% of young mobile users across the world switch providers every year), mobile operators compete viciously to lower prices and keep clients.

A perfect example of this phenomenon is found in the mobile youth market of Indonesia, a country which surpassed 100% penetration last year among 20-24 year-olds. A brutal price war began in 2007 when a new mobile operator, Hutchison, introduced lost-cost plans into a relatively stagnant market.

Indonesia’s established operators responded by slashing prices in a bid to win over a young and fickle base. As mobileYouth reports, this competition directly resulted in a rise in dual ownership, where young consumers found it economically viable to own multiple SIM cards from two or more operators. Indeed, when the price wars were at their worst in 2008, penetration among 25-29 year-olds jumped from 70% to 120%.

Studies in India and Kenya (where mobile customers are enjoying a government-enforced 50-75% drop in rates) also reveal how youth adoption rates in developing countries are being helped along by price wars among mobile operators in their eternal fight against youth churn.

The long-term affect of these price wars on developing countries’ economies may be unclear for now (although Kenya’s inflation rates were directly impacted last month by slashes in mobile rates). What’s apparent is the price wars’ massive effect on youth adoption rates throughout the developing world. It’s clear that young people are the future of mobile technology, and despite their fickle mobile operator preferences, there’s no doubting their long-term commitment to going mobile in unprecedented numbers.

For a terrific review of mobile youth data across the globe, check out 50 Key Mobile Youth Facts from Youth Trends Report online here.