Recently I can by some interesting data on monthly voice and SMS usage in Denmark. But first let me set the stage. It's well known that people are price sensitive ― as per minute prices fall, telephony usage goes up. It's also true that people prefer flat rate pricing as it reduces their mental transaction costs. This graph (from Andrew Odlyzko) shows what happened to mobile minutes of use when flat rates were introduced in the US.
AT&T launched their Digital One-Rate plan in 1998 offering a block of minutes for one monthly fee with no long distance or roaming complications. This plan was so popular that all operators were forced to respond, with the results visible in the graph above.
Today US mobile voice usage is approaching 800 minutes per month and that's average. Leap Wireless and MetroPCS subscribers use 1500-2000 minutes per month. One wonders how much time people can spend on the phone...
So here's the new (to me) data from Denmark.
The Danish regulator has a wonderful set of statistics available in half-year increments. Those above are from 2H02 thru 2H07. Voice minutes are out-going traffic in millions of minutes per period (6 months). The population of Denmark is 5.5 million (82% are over the age of 14) so this represents ~330 voice minutes and ~225 messages per person per month.
Wireless minutes of use continue to rise, but fixed line minutes are falling faster so total voice minutes are falling. But total person-to-person communications is still increasing because SMS and E-Mail usage has soared, growing to roughly 40% of all communications.
This is very interesting as flat rate pricing for monthly bundles of SMS messages was introduced in Denmark in 2002. Meanwhile, Danish mobile voice calls are mostly charged per minute (very typical in Europe) and are expensive compared to the US.
So price matters, but flat rate monthly bundles (rather than per minute or per message charges) is even more important in driving usage.
I wonder if you could look at data in the US by age, if usage would be different. I wonder if, even with an additional cost to have text, if you would see that younger people use more text than voice.
I say this because I would prefer we all used voice in my house because it costs more to add a text bundle for each phone. However, all my girls do is text. I can’t understand it because I’d rather talk than type, especially because you use multiple text messages to hold a simple conversation. My girls can’t even explain why they prefer texting – they just do (other than the fact that you can sneak in conversations in school when you are not supposed to be on the phone). Both of my girls now have plans that allow 5000 texts per month. I was forced to buy a plan too because they don’t listen to my voice messages! We never even come close to using all the voice minutes we pay for. We use less than 300 per month.
Anyway, I just was wondering if we will see a change in the US in the future, even one not related to pricing?
Posted by: Joanne | August 29, 2008 at 10:17 AM
Joanne, I absolutely agree there are other issues, like age and culture, that impact people's use of voice versus SMS. Stumbling on the statistical data from Denmark caused me to think about the impact of flat rate (versus per minute or per message) billing which seems to be the dominate difference between Denmark and the US. But age is also an interesting subject.
I'm not an authority on teenagers (an understatement!), but I'll venture to suggest there are two things that might attract your girls (or anyone) to texting over voice. First, you can pause for a second or a minute before you respond. If you are not good at repartee, those extra moments will help. Second, texting allows you to carry on multiple conversations in parallel.
As for the age difference, it's easier to learn skills when you are young and creating SMS messages is a skill, as is multi-tasking, which adults can pick up, but perhaps not as easily as a child.
Just some thoughts... Thanks for the comment.
Posted by: Brough Turner | August 29, 2008 at 10:38 AM