• by Karlene Lukovitz  @KLmarketdaily, April 9, 2008

Major telcos and other communications carriers have been all over the Hispanic market for at least a decade, and their marketing efforts are expanding and intensifying as they jostle for market share within the new environment of triple- or quadruple-play services.

 

There's no mystery as to the reasons: Hispanics--the fastest-growing population segment--represented $863 billion or 8.6% of total U.S. consumer buying power last year, and their buying power will hit $1.2 trillion by 2012, reports the Selig Center for Economic Growth.

Even more alluring, from carriers' standpoint: By 2012, U.S. ethnic communities will represent $84 billion, or 35% of all residential telecommunications expenditures--and Hispanics, who now make up 14.8% of the population, will spend the most, according to the latest study from The Insight Research Corporation.

Hispanic spending on landline and wireless phone services alone will reach $27.3 billion in 2008, accounting for nearly 16% of projected total U.S. phone spend of $175.3 billion, estimates Insight Research, a telecommunications industry analysis firm based in Boonton, N.J. By 2012, Hispanic spend on these services is projected to reach $42.2 billion within overall U.S. consumer spend of $239.7 billion.

A whopping 65.5% of all Hispanic respondents now have cell phones, and Hispanics' average monthly expenditures on cell phone service is over 80% higher than the average household spend on landline services, reports the study, which also tracks spend data on Internet access and digital TV services.

Further, the Hispanic population is more skewed toward youth than the overall population, which translates to a greater propensity to accept the array of newer services that represent future growth for all types of carriers, stresses Insight Research president Robert Rosenberg. Winning over young adapters, particularly through bundled services, is obviously key to grabbing market share as the new model of open-access to the Internet and content of all types increasingly replaces carrier-specific access limitations, he notes.

A case in point: During last October's fifth annual Hispanic Television Summit, many cable companies chose not to promote the addition of Spanish channels to their programming, but instead to offer long-distance international calling plans that they hope will provide marketing leverage for their triple-play bundles to Hispanic Americans, reports Insight Research.

Reynaldo Caudillo--founder and president of Los Caudillos International, Inc., a Morristown, N.J.-based Hispanic business and market consultancy--points out that whereas many assumed for a time that wireless, in particular, was reaching saturation, the U.S. Hispanic target audience (including Puerto Rico) is easily within the mid 50-million plus range, and that, on average, the U.S. Hispanic population is 10 years younger than the general population.

All of this explains why the big telecommunications players are extremely aggressive in the Hispanic arena, with separate, dedicated Hispanic marketing organizations that specialize in communicating with the 20+ different countries of origin/cultural subsegments, notes Caudillo, who previously worked for both AT&T and Insight Research. Marketing efforts are particularly focused on teens and tweens, although seniors and others also get their fair share of attention, he adds.

Caudillo points out that the major carriers now offer phone packages with low international calling rates (some designed specifically to meet the needs of regional U.S. Hispanic communities), a variety of Hispanic TV channels (directly or through partnerships) and Spanish-language or bilingual Web sites. They also sponsor various regional Hispanic festivals/events, and buy or sponsor popular Spanish-language TV programs and significant amounts of space in Hispanic magazines and print publications.

Here are a few of the innumerable examples of carriers' current Hispanic marketing efforts, gathered from Rosenberg/Insight Research, Caudillo and other sources:

• Both Verizon, through its FiOS service, and AT&T, through U-verse, offer triple-play bundles that include large and expanding packages of Hispanic TV channels, and both are also readying video-on-demand offerings geared to the Hispanic market, reports Insight Research.

• AT&T's new AT&T World Connect Mexico calling plan offers U.S. wireless customers a five-cents-per-minute rate for calling landlines in Mexico and a 21-cents-per-minute rate for wireless-to-wireless calls to and from Mexico. Carlton Hill, VP of voice products and devices for AT&T's wireless unit, reported that Mexico is the #1 international calling destination for wireless customers.

• Comcast Communications is offering a free, unlimited calling plan for the U.S., Canada and Puerto Rico that has become so popular within East Coast Puerto Rican communities that it has inspired the company to develop similar calling plans for Mexico and Latin America, according to Insight Research.

• Verizon Wireless is sponsoring a variety of exclusive exposure opportunities for the popular Mexican pop band RBD. It is hosting the band's U.S. tour and private performances, selling tickets and promoting the band with green-screen technology within Verizon Wireless stores, and offering mobile access through V CAST Music to cuts off the band's new album, videos, ringtones and ringbacks.

• Sprint's recent efforts include partnering with Latin star Juanes to offer exclusive mobile music and video of his latest album and be the exclusive wireless sponsor of his 2008 U.S. tour. Mobile offerings include providing fans with access to the performer's latest material through a series of video mobisodes. The campaign is the first initiative within the Hispanic market to introduce the company's new Spanish-language tagline, "Sprint más allá." (Sprint offers over 95,000 downloadable Latin music titles.)

• IDT Corp.'s Latino-tailored, prepaid TuYo Mobile service offers low rates for direct international calling, downloadable Latino ringtones and graphics and a calling card feature allowing international calling from any phone using a TuYo balance. Rosenberg says that IDT now sells about 235 million prepaid cards annually to Hispanics--although, looking at the bigger picture, four in five U.S. Hispanics who own a cell phone currently have a post-paid contract, according to Insight Research's study.

• TV satellite providers like EchoStar are partnering with telecom companies to develop and promote bundles for the Hispanic community. Telco TV, broadband video and mobile TV are all increasing the need for Hispanic content, Insight Research notes. Do carriers face any significant challenges going forward as they continue to woo Hispanic Americans?

While battling one another is no small challenge, Rosenberg says telecommunications companies as a whole are very well-positioned to succeed in the Hispanic and other ethnic markets because of their highly regulated origins, orientation to providing equal access and sensitivity to serving the needs of all kinds of groups within the population.

Caudillo does see one complication: The Hispanic population, which has traditionally been concentrated in certain regions and cities, is dispersing because of the changing economy and geographic shifts in job market opportunities. For example, the Hispanic population in some states in the South and West has increased substantially in recent years.

Caudillo adds that the language and other challenges that this geographic dispersion poses apply not just to communications carriers, but to all kinds of businesses, as well as the government.