December 2013

Trends in Mobile Usage With Implications for Utility-Customer Communications

©2013 IFACTOR CONSULTING

Trends in Mobile Usage Make the Case for Multi-Channel Communications for Utility Companies

Exposure to leading-edge communication technology tends to create a sense that this technology is widely used, even normal. Communication technology is definitely becoming more common, and has become nearly universal among some groups (at least in the U.S.). However, a deeper look at technology adoption rates reminds us that the situation is more complex than the averages indicate. This document takes a look at some of the most recent statistics about mobile phone and internet use among American adults and how these statistics affect utility-customer communication.

Internet Usage Research by the Pew Internet & American Life Project shows that while internet use is nearly universal among American adults under 50 and those with high income or education levels, internet use rates are reduced to 75% for those with lower income levels, and closer to 50% for adults over the age of 65 and those with lower education levels.

% of American Adults Who Are Internet Users

% of American Adults Who Are Mobile Phone Users

% of American Adults Who Are Smartphone Users

98%

76%

59%

92% 88%78%

83%

94% 92%

56%

96% 96%

Age Income Education

18-2

9

30-4

9

50-6

4

60+

<$30

K

$30-

50K

$50-

75K

$75K

+

<Hig

h Sc

hool

Hig

h Sc

hool

Colle

ge

>Col

lege

97%

86% 83%

95%90% 88%89%

96% 92%

76%

98% 95%

Age Income Education

18-2

9

30-4

9

50-6

4

60+

<$30

K

$30-

50K

$50-

75K

$75K

+

<Hig

h Sc

hool

Hig

h Sc

hool

Colle

ge

>Col

lege

80%

43%36%

67%

52%46%45%

61% 60%

18%

78%70%

Age Income Education

18-2

9

30-4

9

50-6

4

60+

<$30

K

$30-

50K

$50-

75K

$75K

+

<Hig

h Sc

hool

Hig

h Sc

hool

Colle

ge

>Col

lege

Mobile Phone and Smartphone OwnershipBoth mobile phone and smartphone ownership are more likely among young people, those with higher education levels and those with higher income levels. This difference is even more pronounced for smartphone ownership than for mobile phone ownership, and the overall levels of smartphone ownership are lower. This may be due to a combination of the additional cost of smartphones and their related data plans, and the fact that smartphones are a newer technology. Age is the biggest factor in mobile phone and smartphone ownership - young people are more likely to own a mobile phone or smartphone regardless of their education or income levels. This is in keeping with the observation that young adults tend to be early adopters of new technology in general.

Mobile Phone Internet UsageInternet use on mobile phones nearly doubled from 2009 to 2012, rising from 31% to 55% of American adult mobile phone owners. Some of this increase is accounted for by the increase in smartphone ownership, and, like smartphone ownership, is likely to continue increasing.

Trends for age, education and income continue among mobile phone owners for internet use on mobile phones. Young people, those with higher education levels and those with higher income levels (as well as people who do not live in rural areas) are more likely than other mobile phone owners to use the internet on their phones.

Mobile-Mostly Internet UsageMobile-mostly internet users are those who primarily access the internet from their mobile phones, as opposed to a desktop or laptop computer. When we look at the portion of mobile phone internet users who are mobile-mostly internet users, the trend pattern for mobile phone and internet use changes. Although the age trend continues among mobile phone internet users for mobile-mostly internet users, the education and income trends are reversed. Young people are much more likely to be mobile-mostly internet users, but so are those with lower income levels and those with lower education levels.

The relatively high number of mobile-mostly internet users with lower income and education levels may be partly explained by a related statistic about computer ownership. Mobile-mostly internet users as a whole are less likely than mobile-occasionally internet users to own a desktop or laptop computer or to have broadband internet access at home. For example, 30% of mobile-mostly internet users do not have home broadband. However, only 4% of mobile-mostly internet users say that not having home broadband is the main reason that they mostly use the internet on their phones. This may indicate a trend of replacing home broadband and

For some groups, mobile phones are their primary source of internet access.

78%

50%45%

61%

52% 49%

30%

60% 57%

16%

69%64%

Age Income Education

18-2

9

30-4

9

50-6

4

60+

<$30

K

$30-

50K

$50-

75K

$75K

+

<Hig

h Sc

hool

Hig

h Sc

hool

Colle

ge

>Col

lege

% of Adults Who Are Mobile Internet Users

% of Adults Who Are Mobile-Mostly Internet Users45% 43%

39%

29%

36%39%

11%

24%

38%

11%

21%16%

Age Income Education

18-2

9

30-4

9

50-6

4

60+

<$30

K

$30-

50K

$50-

75K

$75K

+

<Hig

h Sc

hool

Hig

h Sc

hool

Colle

ge

>Col

lege

laptop or desktop computers with internet-enabled mobile phones or smartphones, similar to the trend of replacing land-line phones with mobile phones. It is also possible that mobile-mostly internet users are using a combination of internet access on their mobile phones and other resources such as public libraries or coffee shops with free WiFi to replace home broadband.

Sources:• Brenner, Joanna. “Pew Internet: Mobile.” Pew Internet & American Life Project, June 6, 2013, http://pewinternet.org/

Commentary/2012/February/Pew-Internet-Mobile.aspx, accessed on August 9, 2013.• Rainie, Lee. “Internet adoption becomes nearly universal among some groups, but others lag behind.” Pew Research Center

FactTank: News in the Numbers, May 30, 2013, http://www.pewresearch.org/fact-tank/2013/05/30/internet-adoption-becomes-nearly-universal-among-some-groups-but-others-lag-behind/, accessed on August 9, 2013.

• Smith, Aaron. “Smartphone Ownership 2013.” Pew Internet & American Life Project, June 5, 2013, http://pewinternet.org/Reports/2013/Smartphone-Ownership-2013.aspx, accessed on August 9, 2013.

• Smith, Aaron. “Mobile Internet Use 2012.” Pew Internet & American Life Project, June 26, 2012, http://www.pewinternet.org/Reports/2012/Mobile-Internet-Use-2012.aspx, accessed on August 9, 2013.

Conclusion: Implications for Utility Customer Communicationsinclude additional channels. As the internet becomes the new communication standard, utilities will need to adapt to continue meeting customers’ expectations.

• Make mobile-optimized websites and mobile apps a high priority - To connect with the growing number of mobile internet users, especially those who access the internet most often from their phones, mobile communication methods are essential. These customers will be frustrated by websites that are not formatted for mobile phone access.

There is no one-size-fits-all solution for reaching utility customers. Unlike other industries that may cater to one demographic or another, utility usage is as vast and varied as the U.S. population itself. To maintain customer satisfaction and reach the broadest number of customers possible, utilities will need to establish a multi-channel communication strategy that reaches customers across a variety of communication channels.

So what do all these numbers mean for utilities? The statistics about mobile phone internet usage show that American adults form a communication technology spectrum - from those who either lack access to or interest in the internet, to those who access the internet primarily on their mobile phones.

To reach as many of their customers as possible, utilities should:

• Retain at least some of their traditional forms of communication - For those customers who don’t have mobile phones or internet access, utilities will need to continue providing communication through call centers and media such as printed bills, bill inserts, and radio and television announcements and advertisements.

• Add web and mobile communication - To respond to widespread internet use and mobile phone ownership, utilities need to expand their communication plans to

Age is the biggest factor in mobile usage, but not the only factor to consider.

60 E Rio Salado Parkway, Suite 715Tempe, AZ 85281

800 631 9839info@ifactorconsulting.comwww.ifactorconsulting.com

©2013 IFACTOR CONSULTING

iFactor creates and delivers communications solutions that allow utility companies to engage with their customers using web and mobile technologies.

Our suite of self-serve customer communications products includes Storm Center™ for outage

communications, Notifi® for proactive alerts and preference management, and

iFactor Mobile™ smartphone applications.

Today, over 100 million people receive utility communications thanks to iFactor. Contact iFactor now to

start planning your customer communications strategy.