The rise of the data exclusive

TMT Predictions 2016

Executive summary

Deloitte Global predicts that in 2016, 26 percent of smartphone users in developed markets will not make any traditional phone calls in a given week. We call these individuals ‘data exclusives’. They have not stopped communicating, but are rather replacing traditional voice calls with a combination of messaging (including SMS), voice and video services delivered ‘over the top’. The data exclusive contingent was 22 percent of all smartphone users in 2015, and 11 percent in 2012 (see Figure 1).

In recent years there have been two contrasting trends with voice. First, mobile voice volumes as measured in minutes have increased by 20 percent between 2012 and 2015, likely because of the increased affordability of voice minutes, the rising take-up of unlimited voice packages, an increase in voice minute allowances and an ongoing substitution of fixed to mobile calling. Second, most smartphone owners’ usage patterns have become more data-intensive, with the proportion of time spent on non-voice activity increasing considerably; in some markets, such as the UK and the US it has reportedly trebled.

What may be happening is a polarization in the usage of voice on mobile: some users are increasing their voice call volumes; at the other end of the scale a growing proportion are not using voice at all.

A key catalyst for the fall in the proportion of people making voice calls on their smartphones has likely been the proliferation of options to communicate without speaking. While voice calls have been declining, various forms of data communication have become more popular. As of mid-2015, the most popular data service was text messaging, with 60 percent usage, closely followed by instant messaging, email and social networks. Note that it is not just private conversations that are being usurped. An app can replace the calls we would have formerly made to order a take-away, request a taxi, book an appointment or make a bank transfer.

The age group with the largest proportion of data exclusives as of mid-2015 was 18-24 year-olds, 31 percent of whom (in developed countries) reported not making phone calls on a weekly basis, compared to the average for adults of 22 percent. In 2016 and beyond the proportion of data exclusive 18-24 year-old users may rise further still, given that upcoming members of this cohort are likely very accustomed to messaging. Their first communications device as young children may have been a touch-screen MP3 player or a WiFi tablet, which can readily be used for messaging but lacks a cellular modem for traditional voice calls. By the time a teen grows up and has the funds to pay for a regular mobile phone package that includes voice calls, he or she may regard messaging as the default mode of communication and may instinctively avoid making voice calls.

The original premise of the smartphone was that it would enable voice and data communications via the one device. However, in the last decade the data capabilities of smartphones have steadily ratcheted up, in the form of bigger screens, faster connectivity, more powerful processors, superior cameras and improved graphics capabilities – all of which contribute to the trend of people choosing data communications instead of traditional voice calls.

The rise of the data exclusive

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