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US Hispanic Use of Telecommunication Services 2006 - 2011
a market research report
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One out of every three dollars spent on telecommunications services in 2009 will come from US ethic communities, so the spending power of the Hispanic-American, African-American, and Asian-American communities will become crucial to the survival of telecommunications providers over the next five years.
This market report takes a close look at the purchase habits and telecom usage patterns of the burgeoning Hispanic segment of the US population. In the last census, Hispanics surpassed the African-American population as the largest minority group in the US, catching much of corporate America off guard. US Hispanic purchasing power is now growing at nearly twice the rate of the general population, fueled by continued population growth and increasing Hispanic employment and income levels.
US Hispanics are heavy users of beepers and pagers, local, long-distance, and international calls, and spend considerably more than the general market on value-added services such as call waiting and caller ID. Prepaid services have also experienced explosive growth in the US Hispanic market.
In this report, Insight examines spending by US Hispanics on local,
long-distance, ISP, wireless, and pre-paid services, and compares these
spending patterns to the general population and to other minority
segments including Asian Americans and African Americans.
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Report Excerpt
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1.1 US Hispanics & Telecommunications
In early May of 2006, the US Census Bureau reported that one-third of the United State’s population was comprised of minorities. The country’s minority population totals something north of 98 million, or more than 33 percent of the nation’s total population of about 296.4 million. The clout of these ethnic communities cannot be ignored by telecommunications services providers, since INSIGHT’s research suggests that today these ethnic communities also account for nearly one third of every dollar spent on telecom services.
Hispanics continue to be the largest minority group with a population of 42.7 million (nearly 44 percent of the US minority population) and, more importantly, remain the fastest growing group. The US now ranks as the third most populous country, following only China and India. Unlike other industrialized countries whose populations are level or shrinking, the US continues to grow at just under one percent per year. Newly arrived immigrants and higher fertility rates, particularly among Hispanics, fuel much of this growth.
Sizeable Hispanic populations are evident today in every region of the country and most states; in several states, minority populations dominate. Based on the US Census population estimates, Texas became the nation’s newest “Majority-Minority” state. The Lone Star state joins Hawaii, New Mexico, and California, as well as the District of Columbia, with the majority of their respective populations made up of “minority” ethnic communities. In the next few years, Maryland, Mississippi, Georgia, New York, and Arizona will join the list with minority populations hovering around 40 percent. The Census Bureau reports the minority population as all people except non-Hispanic single-race whites.
Table I-1 shows the states with the highest concentration of Hispanics as of July of 2005 and projected through July of 2025.
Table I-1 States with Highest Concentration of Hispanics, 2005, 2015, and 2025
1.2 US Hispanic Market Trends
Understanding the considerable diversity among the populations that will make up the purchasing public in the years ahead is a major prerequisite to designing a successful telecommunications marketing campaign. The growth of the US Hispanic market in the first 20 years of the 2000s will be as significant as the baby boom of the 1950s and 60s. This segment offers significant business opportunity and growth for telecommunications providers that can successfully target this demographic. Companies need to begin demonstrating that they have a sincere interest in the US Hispanic market—a desire to familiarize themselves with the culture and to develop brand and loyalty relationships. Because of the growth opportunities involved, carriers need to recognize the US Hispanic market as a fundamental element of their market strategies.
A key point that must be embraced in any successful making campaign is that the US Hispanic population is growing three times faster than the rest of the population, and it is, on average, 11 years younger than the nation’s median age of 35 years. Most importantly, it has the greatest opportunity for income growth...
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Market Segmentation
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Total US Residential Telecom Expenditures
- Residential Wireline
- Residential Wireless
Growth of US Residential Telecom Expenditures
- Wireline
- Wireless
Cell Phone Ownership/Penetration by Ethnicity
- White Non-Hispanic
- African American
- Asian
- Hispanic
- Spanish Dominant
- Bi-Lingual Hispanic
- English-Oriented
Hispanic
- By Age
- By Education
- By Income
- By household
Total Ethnic Residential Wireline and Wireless Telecom Expenditures
- Total Residential
- Ethnic Residential
- African-American
- Hispanic
- Asian American
Total US Wireless Subscriber Growth
- Wireless Subscribers
- Wireless as Percent of Population
- Hispanic Wireless Subscribers
- Projected Prepaid Wireless Subscribers
Growth of US Residential Wireline/Wireless Telecom Expenditures by
Race/Ethnicity
- African-American
- Hispanic
- Asian American
Total Hispanic Residential Telecom Expenditures
- Hispanic Residential Wireline
- Hispanic Residential Wireless
Growth of African American Residential Telecom Expenditures
- Wireline
- Wireless
Growth of Asian American Residential Telecom Expenditures
- Wireline
- Wireless
Wireless Residential Expenditures by Race/Ethnicity
- Hispanic
- African-American
- Asian-American
Growth of Wireless Residential Expenditures by Race/Ethnicity
- Hispanic
- African-American
- Asian-American
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Table of Contents
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Chapter I
EXECUTIVE SUMMARY
1.1
US Hispanics & Telecommunications
1.2
US Hispanic Market Trends
1.3
Forecast of US Hispanic Telecom Expenditures
Chapter II
CURRENT MARKET ANALYSIS AND TRENDS
2.1
Overall US Population
2.2
Hispanic Are the Largest Ethnic Minority in the US
2.3
“Majority-Minority” US States
2.4
Defining the US Hispanic Market
2.5
The US Hispanic Market Boom
2.6
The Power of the US Hispanic Market
2.7
US Hispanic Market Trends
2.8
US Hispanic Households
2.9
The Use of Spanish Language
2.10
Hispanic Educational Attainment
2.11
Wireless Subscriber Growth at Unprecedented Rates
2.11.1
Wireless Minutes on the Rise
2.11.2
Total Wireless Revenues
2.11.3
Wireless US Market Penetration
2.12
Cell Phone Usage in the US Youth Market
2.13
The Hispanic Youth Market
Chapter III
ADDRESSING THE US HISPANIC CONSUMER
3.1
Marketing to US Latinos
3.2
Latin American and American Latino Culture
3.3
The Need for Integrated Marketing
3.4
English Rules among US Born Hispanics
3.5
Wireless Industry’s Best Customers “Hablan Español”
Chapter IV
TELECOM OFFERS AND PROGRAMS
4.1
The Telecom Landscape
4.2
VoIP’s Bright Future
4.3
Internet Portals and VoIP Offers
4.3.1
AOL’s TotalTalk
4.3.2
Google Inc.
4.3.3
MSN Messenger
4.3.4
Yahoo Messenger
4.3.5
¡Hola!
4.4
Mobile Virtual Network Operators (MVNOs)
4.4.1
Disney Mobile
4.4.2
Mobile ESPN
4.4.3
Movida
4.4.4
Virgin Mobile USA
4.4.5
Amp’d Mobile
4.4.6
Other MVNO Startups
4.4.6.1
HELIO
4.4.6.2
VOCE
4.4.6.3
BOOST
4.4.6.4
7-Eleven
4.4.6.5
Wal-Mart
4.5
The Cable Companies
4.6
Re-investiture of the Bell System
4.7
AT&T (SBC Communications)
4.8
Bell South
4.9
Cingular Wireless
4.10
IDT Corporation (TúYo)
4.11
Qwest
4.12
Sprint Nextel
4.13
Alltel
4.14
T-Mobile USA, Inc.
4.15
Verizon Communications
4.16
Verizon Wireless
4.17
Hispanics Online
4.18
Twenty-One Million Hispanic Internet Users by 2010
4.19
Websites Most Visited by Hispanics
Chapter V
FUTURE PRODUCT AND SERVICE TRENDS
5.1
The Decline of the Landline
5.2
Cell Phone Service and Ethnicity
5.2.1
Cell Phone Ownership by Race/Ethnicity
5.2.2
Cell Phone Expenditures by Race/Ethnicity
5.2.3
Wireless versus Landline Expenditures
5.3
Hispanics & the US Wireless Market
5.4
The US Prepaid Wireless Market
5.5
Telecom Expenditures Continue to Grow
5.5.1
Ethnic Telecom Expenditures
5.5.2
Comparison of Ethnic Telecom Expenditures
5.6
The Growing Importance of Hispanic Marketing
Appendix
GLOSSARY
Table of Figures
Chapter I
I-1
Cell Phone Ownership by Race/Ethnicity (Percentage)
I-2
Total Residential and Total Ethnic Residential Telecom
Chapter II
II-1
Hispanic Percent Distribution by Country of Origin
II-2
US Hispanic Purchasing Power, 2006-2011 ($Billions)
II-3
Average US Hispanic Household Pop by Country of Origin
II-4
Cell Phone Ownership by Race/Ethnicity (Percentage)
II-5
Cell Phone Usage by Hispanic Sub-segment (Percentage)
II-6
Cell Phone Ownership by Hispanic Country of Origin (Percentage)
II-7
Youth and Ed Reflected in the Acculturated Latino segment
II-8
Estimated Wireless Subscribers, 2000-2005 (Millions)
II-9
Reported Wireless MOUs, 2000-2005 (Trillions of MOUs)
II-10
Verizon Wireless Get it NOW Spanish-language Ad
Chapter III
III-1
Hispanic American Segmentation (percentages)
III-2
Designated Market Areas: Chicago vs. Miami-Ft. Lauderdale
III-3
Latino Attitudes toward Assimilation
III-4
Spanish Language Usage by Designated Market Area
III-5
Designated Market Areas with Exp over $100/Month
III-6
Sí TV English Language Ad with the Latin Connections
III-7
US Hispanic Population, Actual and Projected by Generations
Chapter IV
IV-1
US Residential Broadband VoIP Households, 2005-2010
IV-2
AOL’s Latino Ad Campaign
IV-3
Sample Cingular Prepaid GoPhone Ads for Hispanic Consumers
IV-4
Internet Penetration by Language Preference
Chapter V
V-1
Cell Phone Penetration by Race/Ethnicity
V-2
Cell Phone Ownership by Age
V-3
Cell Phone Ownership by Education (Percentage)
V-4
Cell Phone Ownership by Income (Percentage)
V-5
Average Monthly Cost of Cell Phone Service
V-6
Cell Phone Usage at Monthly Spending Levels by Race/Ethnicity
V-7
Percent of Households Spending $32 or more per Month
V-8
Average Monthly Household Expenditures
V-9
Growth of Total US Residential Wireline and Wireless Exp
V-10
Growth of the US Residential Expenditures by Race/Ethnicity
V-11
Growth of Hispanic Residential Telecom Expenditures
V-12
Growth of African American Residential Telecom Expenditures
V-13
Growth of Asian American Residential Telecom Expenditures
V-14
Growth of Residential Wireline Expenditures by Race/Ethnicity
V-15
Growth of Residential Wireless Expenditures by Race/Ethnicity
Table of Tables
Chapter I
I-1
States with Highest Concentration of Hispanics
Chapter II
II-1
US Annual Estimates by Race Alone,
II-2
Components of Population Change by Race and Hispanic or Latino Origin
II-3
States with Highest Concentration of Hispanics
II-4
Hispanic Population Projections 2005-2011 (Millions)
II-5
Population of Major Hispanic Countries and US Hispanic Population
II-6
Ratio of Caucasian to People of Color by Age Category
II-7
Top 20 US Markets By Hispanic Households
II-8
US Hispanic Population by Age/Sex Distribution
Chapter III
III-1
Hispanic American Segmentation Model
III-2
Differences between Foreign-born and Native-born Hispanics
III-3
How Latinos Identify Themselves
Chapter IV
IV-1
Monthly Cell Phone Subscribers Activity
IV-2
Percentage Change in Hispanic Buying Power
IV-3
Hispanic Online and Growth, August 2004 vs. 2005
Chapter V
V-1
US Access Line Trends: Residential and Business
V-2
US Access Line Estimates, Residential and Business
V-3
US Residential Primary Access Line Declines
V-4
1Q 2006 Wireless Carrier Revenue and Subscriber Data
V-5
US Households with Multiple Wireless Phones, by Carrier
V-6
Cell Phone Attitudes: Profiles of Whites and Non-Whites
V-7
Projected Hispanic Population Growth, 2006-2011
V-8
Wireless Subscriber Growth, 2002-2011
V-9
Projected Hispanic Wireless Subscribers, 2006-2011
V-10
Projected Average Wireless Subscriber Monthly Expenditure
V-11
Projected Prepaid Wireless Subscribers
V-12
Total US Residential Telecom Expenditures
V-13
Total US Ethnic Residential Telecom Expenditures
V-14
Total US Hispanic Residential Expenditures, 2006-2011
V-15
Total African American Residential Wireline and Wireless
V-16
Total Asian American Residential Expenditures
V-17
Residential Wireline Expenditures by Race/Ethnicity
V-18
Residential Wireless Expenditures by Race/Ethnicity
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