What do I need to know?
- Despite declining populations, younger users are attractive for mobile operators who hope to attract customers for life
- Youth discounts typically offer the same data allowance as normal plans, but in some cases offer slightly more or faster data
- Sub-brands and MVNOs are a way for operators to attract value-conscious consumers, and to experiment with new types of plans and features
- Youth plans typically feature zero-rated apps or other add-ons to differentiate them from the normal plans
- The UK’s operators all offer discounts for university students, though these offers aren’t accessible to all students, and are severely time-limited
Background
Falling birth rates and migration have caused youth populations in much of Western Europe to decline, such that mobile plans targeting the under-30 demographic suffer from relatively small addressable markets. For example, Germany’s population aged between 18 and 28 accounts for only around 11% of the total, while those in Spain and Italy are even smaller.
Despite the small addressable market, the youth demographic tends to be more connected, and more interested in new technologies, making them more desirable to operators who want traffic on their networks. These younger users also represent a demographic to capture for the long term, by upselling them to more expensive plans as their buying power improves.
Types of Youth Plans
Youth plans fall into four categories, based on the strategy of the operators and the age groups they’re targeting. For the purposes of this report, the term “youth plans” will refer to plans aimed at people under the age of 30 and plans aimed at university students. Plans aimed at teenagers or add-on plans for children will be covered in a different report.
Youth Discounts
The dominant model in Germany, these aren’t stand-alone plans per se; rather, the operators have applied a discount to their existing plans for users under a certain age (28 in Germany, 29 in Norway and ages 18-27 in Sweden). The data allowances are the same as for older users, though in some cases the operator might offer zero-rated access to apps for younger users and not for older users.
All three German operators offer these discounts for users under the age of 28. However, Deutsche Telekom and O2 offer discounts of EUR10 off the regular monthly price, while Vodafone offers discounts between EUR15 and EUR25 compared with the price for those over 28. Vodafone’s lowest-tier youth plan also features less data, 2GB per month compared with 4 GB for the regular version, but also includes zero-rated access to apps among four categories: social media, chat apps, music and video.
| Operator | Country | Discount Range |
|---|---|---|
| Deutsche Telekom | Germany | EUR20 |
| O2 | Germany | EUR10 |
| Vodafone | Germany | EUR15-EUR35 |
| Telia | Norway | Data boosts and music included |
| Telia | Sweden | SEK50 |
| Swisscom | Switzerland | CHF5-CHF10 |
| Sunrise | Switzerland | CHF5-CHF10 |
| Salt | Switzerland | CHF10 |
Telia also offers youth discounts, in Sweden and Norway. In Sweden, its Ungdomsrabatt takes SEK50 off the monthly subscription price for plans offering data allowances of 12GB, 30GB or unlimited data. Its 200MB and 2GB plans are the same price for all users, as is its Ekstra Användare add-on for users to join a friend or family member’s plan. In Norway, there’s no specific youth rebate, but customers under 29 years old receive an add-on for zero-rated music apps, and two data boosts each month that give unlimited data for three hours.
In Switzerland, operators offer most youth plans at a discount to their equivalents for older users, but in some cases the youth version of a plan costs the same but offers more data. In addition, because Swisscom and Sunrise differentiate certain tiers by download speed, the youth version of a plan will sometimes offer faster speeds than the standard version, particularly if the plan offers unlimited data.
Sub-brands and MVNOs
Another way that operators target the youth market is through sub-brands and mobile virtual network operators (MVNOs). The goal is to offer value-conscious users a cheaper alternative to the operator’s normal plans, and potentially upsell the user when their buying power increases. In some cases, the overhead for the sub-brands is much lower, because functions like customer service can be crowdsourced through the user base rather than hiring a dedicated department to answer basic questions.
This strategy is fairly widespread in Europe, even beyond youth-focused plans. For example, each of the operators in Germany offers a sub-brand for value-conscious users alongside its normal plans, and they also sell capacity on their networks to independent MVNOs, though in that case the operator doesn’t have a direct relationship with the customer. The plans covered here are explicitly aimed at younger users, whether because they have an age limit or because their service is promoted through channels that are more frequented by younger uses.
| Operator | Country | Brand |
|---|---|---|
| Orange | France | Sosh |
| Bouygues | France | B&YOU |
| SFR | France | RED |
| NOS | Portugal | WTF |
| Vodafone | Portugal | Yorn |
| Movistar | Spain | Tuenti |
| Vodafone | Spain | Yu |
| O2 | UK | Giffgaff |
| Vodafone | UK | Voxi |
France is the market where youth-focused sub-brands are most prevalent. Each of the three legacy operators set up a sub-brand aimed at younger users in 2012, in anticipation of the launch of fourth-placed challenger Free Mobile. At the time, Sosh (Orange), B&YOU (Bouygues) and RED (SFR) were true sub-brands, with separate websites, but more recently Orange and Bouygues have incorporated the Sosh and B&YOU plans on their own websites, though they’ve kept the focus on younger users.
The sub-brand model is also present in Spain, the UK and Portugal. Vodafone offers youth-focused sub-brands in each market, though each country’s youth brand and product offerings are different. Voxi, in the UK, was initially only available to users under the age of 30, and offers zero-rated apps and an unlimited data tier. Vodafone Yu, in Spain, offers zero-rated social and messaging apps, as well as rollovers of unused data, and includes special rates for customers who also take fiber broadband. Vodafone Portugal’s Yorn, meanwhile, offers lower monthly data allowances than the other sub-brands, but its charges appear lower because it charges weekly instead of monthly.
Telefonica is also present in both Spain and the UK, thanks to its sub-brands Tuenti (Spain) and Giffgaff (UK). Tuenti started out as a social network, but was converted into a separate mobile brand after being bought by Telefonica; Giffgaff, on the other hand, started out as a mobile sub-brand but incorporated aspects of social media from the start. For instance, most customer service functions, other than those relating to credit card numbers and other sensitive personal information, were outsourced to the user community, while users can suggest new features that the rest of the community then votes on whether to adopt.
Youth Plans
A number of operators have designed plans aimed at users aged under 30, which typically include perks like zero-rated chat or social media apps, large data allowances and in some cases extra data for distance learning during the pandemic. Italy is the main market where these kinds of plans are available, though some operators in Austria, Norway and Belgium offer them too. Until recently every Italian operator had an under-30 plan, but incumbent TIM has discontinued its TIM Young Senza Limiti plan.
| Operator | Country | Plan |
|---|---|---|
| Magenta | Austria | Mobile Youth S, M, L |
| Proximus | Belgium | Epic |
| Vodafone | Italy | Shake It Easy |
| WindTre | Italy | Young 5G, Young 5G+ |
| Telenor | Norway | Yng Goodies |
| IceNet | Norway | iceUng |
In Norway, Telenor offers a range of youth (18-27) plans called Yng Goodies, which include similar amounts of data as the normal plans, at similar prices, but also include between one and three Goodies, or extras, ranging from data boosts and extra roaming data to monthly contributions by Telenor to environmental organizations. Telenor is the only operator in this category to offer an unlimited-data plan, which makes up for the fact that the rest of its Yng plans feature less data than almost all the other operators’ youth plans.
Belgian operator Proximus offers the Epic plans, which claim to feature zero-rating for different types of apps, depending on the tier you buy. The lowest-priced tier, Epic Stories, focuses on social media apps, while Epic Beats includes streaming music (including Spotify and Apple Music). The highest tier, Epic Videos, features the likes of YouTube and Netflix. However, on reading the fine print of these plans, it turns out these apps aren’t actually zero-rated – rather, the operator throttles data speeds after customers reach their limits (25GB, 25GB and 40GB respectively). Each plan includes a further 4GB, which Proximus says vaguely is “for all the rest”. To add insult to injury, Epic Videos is the only tier that offers unlimited voice calls.
Student Plans
The final category is plans aimed at university students. These types of plans are available only in the UK and Italy.
Each operator in the UK offers a discount to university students, either through a partnership with a student loyalty brand (EE with Student Beans, O2 with Unidays and Totum) or on its own. Vodafone’s student discount is available to students of universities that have signed up with the operator, while Three’s users have to enter a university email address. The discounts are between 10% and 20% off the regular monthly price, and can come with fairly large negatives: O2’s discount is only on the voice, SMS and data portion of their bill and not on their phone, while Three’s discount ends after six months. By contrast, EE’s student discount includes an extra 500MB of data each month for the duration of the contract.
In Italy, TIM and Vodafone offer plans aimed at users under 25, rather than explicitly at university students. However, TIM’s Super Young 5G, which is notable in offering 5G access, includes zero-rated e-learning apps. Vodafone’s Shake It Fun plan, on the other hand, offers neither of those things, but it does include a fairly generous data allowance of 40GB per month, though TIM’s is again larger, at 50GB.
Summary
Overall, the best-designed youth plans are probably the ones that offer discounts on an operator’s normal plans. They offer a range of price points and data allowances, meaning that a user under the specified age limit can choose the plan that suits them best; contrast this with the operators who offer one or two dedicated youth plans that include certain zero-rated apps but have a lower data allowance than regular plans.
Sub-brands may start out aimed at younger users, but in some cases have proved so popular that the operator has scrapped the age limit, or never really intended for the brand to be used only by younger users. Among this group, Giffgaff stands out as the most interesting because of its focus on crowd-sourcing both new products and customer service. The model may be unsustainable for the main brand, but by creating a community O2 has gained key insights into what Giffgaff’s users want from mobile providers, and it’s transferred this knowledge to its main brand.
Student discounts are generally disappointing. TIM’s plan is the only one that appears to have been designed with the actual needs of students in mind, given that it includes zero-rated e-learning, a feature that proved invaluable during Italy’s pandemic lockdown. By contrast several of the student discounts in the UK require too many hoops to jump through, by being accessible only if the student is also a member of certain loyalty brands; worse, in all cases the discount lasts for less time than most students are at university, even when they last longer than Three’s stingy six months.
FRD Innovation Research 