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The New Crystal Ball: Age as a Predictor of Communication Service Demand
What does the future of the communications market look like? More to the point, how can communication service providers (CSPs) assess the demand for their services, one, two or even five years in the future? The usual way in which predictions of this sort are done is to look at trends based on previous consumer buying behavior, and then apply some judicious assumptions on how evolving market dynamics will impact those trends in the future. This is the way that Stratecast makes market predictions for consumer communication services demand. In the short term this approach works very well, and Stratecast predictions have run within % of the actual market performance. However, what if one wants to look farther into the future than just the next three to five years'2 Predictions based on survey data are just too unstable to trust much more than five years out. There is a rapidly increasing uncertainty level that, at five years out, can run as high as plus or minus % of the predicted demand.
Clearly, beyond this point, predictions, based on current market metrics or survey data, are more of an educated guess. Yet, there is a novel way of predicting, if not consumers’ preferences, at least consumers’ proclivity to buy communication services generally. This way is through population age distribution analysis. When a population is viewed by its age distribution, predictions of future buying behavior can be made with some confidence.
Applied at a national or strategic level, such an approach provides reliable insights into current global political dynamics. Applied at the macro-economic level, and to the consumer communication services market specifically, this approach provides a road map for service provider planning. This SPIE provides an introduction to age distribution analysis; and then applies this approach to predicting the evolution of the consumer communication services market—that is, voice, video, Internet access and wireless. Although the focus of this paper is communication services, the research approach is equally applicable to a wide range of market analyses.
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