Thursday, April 13, 2006

One-Fourth of Mobile Customers Jump Ship Annually

One-Fourth of Mobile Customers Jump Ship Annually

According to a recent Forrester report release, nearly 98 million US households will have a mobile phone by 2010. As market saturation approaches, subscriber churn has become a critical issue for mobile carriers. 24% of US mobile subs switched providers between 2004 and 2005, and another 16% plan to switch in the next two years or more. Number portability, commoditized mobile offerings, and lifestyle-based service providers will continue to create churn, going forward.

The 24% of US mobile subs who switched carriers between 2004 and 2005 are younger, more likely to be female, less likely to be white, and are more optimistic about technology than the average mobile subscriber.
  • 43% of AT&T Wireless' displaced subs were acquired in Cingular's buy-out
  • Many of Cingular's lost subscribers went to Verizon
  • Verizon's turncoats signed up with Cingular and T-Mobile
    Sprint lost subs to Verizon
  • T-Mobile former subscribers went to Cingular

In this game of musical mobile providers, the biggest, Verizon and Cingularr, win, while the littler guys like Alltel, Cellular One, and U.S. Cellular are just treading water, says the report.

Consumers who are planning to switch mobile carriers in the future are spending more than $4 more per month on mobile service than those who are likely to stay put, and are primarily looking to improve the price and service aspects of their mobile experience. Handset selection, customer service, data services, and unique content are all secondary considerations, even for those consumers who currently use advanced mobile features like data or messaging.

The study suggests several ways providers can differentiate themselves to maintain their base and attract switchers:

  • Allow customers to store photos, text messages, emails, and IM on the network.
  • Entice the big spenders with the hottest upcoming handsets
  • Be an objective advisor to confused consumers
  • A multiservice bundle, including mobile, from one company will make it less likely that the current subscriber will defect
  • The delivery of audio and video via handsets provides unique leverage

More current and continuing consumer information from Forrester can be found here.

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