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December 3, 2013

Why Your Utility Needs Mobile Communication Channels

Research by the Pew Internet & American Life Project found that as of May 2013, 91% of American adults have a cell phone and 56% of American adults have a smartphone. At the same time, landline phone use is declining – by the end of 2012, only 35.8% of American households owned a landline phone, according to a report by the Centers for Disease Control.

The increasing popularity of cell phones – especially smartphones – is creating new demand for mobile customer communication channels from utilities. According to J.D. Power and Associates, younger customers prefer to get outage information from utilities through text messages, on websites, and via smartphone applications, while older customers still prefer being called by the utility or receiving outage information through news media reports. Nielsen research (see graph below) provides a potential explanation for the trend of younger customers preferring mobile communication channels, as younger demographics have higher smartphone adoption rates than older demographics.

Nielson Smartphone Usage Data

Interestingly, smartphone adoption remains relatively high among lower income consumers, especially among consumers under 34, possibly because smartphones are less expensive than desktop and laptop computers. Also, more people are using their mobile phones to access the internet. According to Pew research, internet use on mobile phones in the U.S. nearly doubled from 2009 to 2012, rising from 31% to 55% of adult cell phone owners. Additionally, the the research found that 31% of smartphone owners spend more time on the internet using their phones rather than laptops or desktops.

The combination of these trends – the increasing popularity of smartphones, the decreasing use of landline phones, the high rates of smartphone adoption among young consumers across all income levels, and the increased use of mobile devices to access the internet – suggests that utilities should focus on providing mobile-optimized communication channels.