Expanding Horizons: Telcos & the U.S. Hispanic Market

The U.S. Hispanic population has emerged as a critical segment for telecommunications operators. With over 62 million people, their spending power is expected to reach $2.5 trillion by 2026. To understand how telecommunications companies can capture opportunities within this segment, Altman Solon surveyed over 400 Hispanic consumers and Hispanic-owned small and medium-sized businesses (SMBs) in the United States. Survey findings offer insight into connectivity, video advertising preferences, and buying patterns that can help inform telecom leaders' strategies for capturing value within this segment.

Engaging Hispanic-Owned SMBs

The Hispanic-owned small and medium-sized business (SMB) segment contributes over $800 billion to the economy; however, these businesses have lower rates of adopting new telecom products than non-Hispanic-owned small businesses.

Telecom operators have unique opportunities to engage this growing demographic, notably by experimenting with bundling connectivity products and digital safety services. Telecom operators can create inroads with this fast-growing segment by investing in customer support and focusing on reliability in conjunction with price. Altman Solon's Hispanic Telecom Survey of small- and medium-sized businesses highlights three emerging trends for telecom leaders to consider:

1. Connectivity Gaps: Hispanic-owned SMBs adopt fewer traditional telecom products than non-Hispanic-owned SMBs, especially cloud solutions and cybersecurity. They mainly use business internet and mobile phones. Strengthening ties with early-stage Hispanic-owned businesses will help telecoms build loyalty as they grow.
2. Digital Safety Priorities: Hispanic-owned SMBs increasingly bundle security and monitoring services with their connectivity providers. 43% of survey respondents have already done so, and 51% of those without digital identity protection services plan to purchase them from their connectivity provider in the next 1-2 years. Telecom providers can create value by upselling these services to underserved Hispanic-owned SMBs.
3. Reliability and Trust: When bundling with a telecom provider, Hispanic-owned SMBs consider cost, reliability, and a strong track record. Network robustness and expertise in servicing SMBs are crucial for appealing to this market.

Consumer Connectivity and Preferences

The consumer segment of the Hispanic Telecom Survey explored the motivations and factors affecting U.S. Hispanic consumers' connectivity preferences, including generational status, access to financial resources, and native language. Findings from the survey reveal that telecom operators are well-positioned to bundle emerging and adjacent telecom products, including cybersecurity and telehealth, and leverage streaming media when capturing value with this segment.

Key trends from the survey include:

1. Cybersecurity and telehealth as bundling opportunities: Over 55% of Hispanic consumers are interested in purchasing cybersecurity or telehealth services from their telecom provider. Cybersecurity services are of interest to Hispanic consumers in part because they are more likely to share devices among multiple users. Telehealth services appeal to an interest in broader healthcare access. Telecom operators should target consumers across income levels and offer bundled packages with enhanced digital security and telehealth services.
2. Streaming Media: Hispanic consumers show a higher interest in streaming media, especially live sports, Spanish-language content, and social media platforms. Access to content from their family's country of origin is a key factor in their subscription decisions. Incorporating these preferences into go-to-market plans can strengthen connections with this growing demographic.
3. Branding and Multigenerational appeal: Hispanic consumers are much more likely to live in multigenerational family units, leading to more group decision-making. This necessitates marketing strategies with multiple decision-makers in mind, acknowledging generations and linguistic preferences to foster loyalty among this demographic.

Capturing Value with a Growing Segment 

As the demographic landscape of the U.S. continues to evolve, telecom operators must adapt and innovate to meet the distinct demands of the Hispanic market. For telecommunications companies to unlock growth within this segment, operators need to tailor their strategies around the unique needs of Hispanic consumers by exploring bundled products and services, embracing streaming media, and marketing toward intergenerational households.

About the Analysis 

In July 2023, Altman Solon explored the connectivity-driven telecommunication and media needs of Hispanic consumers and Hispanic-owned SMBs by surveying over 400 Hispanic-identifying consumers and small business owners in the United States across income brackets. The survey considered variables like generational status, access to financial products, ethnicity, and preferred language. Survey results were compared to those of a representative control group. Explore additional insights from our Hispanic Telco & Media Survey here.