[opendtv] Smartphones encourage mobile user churn
- From: "Manfredi, Albert E" <albert.e.manfredi@xxxxxxxxxx>
- To: "opendtv@xxxxxxxxxxxxx" <opendtv@xxxxxxxxxxxxx>
- Date: Thu, 23 Sep 2010 14:11:45 -0500
The parallel with TV distribution nets should not be missed. This provides an
answer to the question, why in the blazes can't we have a good choice of
MVPD-agnostic boxes for sale in the US?
Bert
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http://www.rethink-wireless.com/2010/09/22/smartphones-encourage-mobile-user-churn.htm
Smartphones encourage mobile user churn
Owners of high end handsets are the least loyal, bad news for AT&T
By CAROLINE GABRIEL
Published: 22 September, 2010
High end smartphones not only bring operators' networks crashing down with
their high rates of data consumption, but they breed fickle consumers who will
worsen churn levels, especially as users get more hostile to two-year contract
lock-ins. The downside of the smartphone boom is highlighted in a survey by
Nokia Siemens, which found that users of high end handsets are the least likely
to stay with their carrier.
In the US, 31% of this group are ready to switch cellco for better services,
and only 17% say their current carrier is the only one they would ever consider
using. This is despite the rising cost of early termination fees, and the
operators' enthusiastic efforts to talk up their investment in improving their
networks' performance and coverage.
Before smartphones, the main driver of customer loyalty was network coverage
and signal strength. Now the device is the main factor for customers choosing a
carrier, and applications and services play a major role in keeping them loyal,
both to the device and the network.
The major test of consumer loyalty will come with the end of the AT&T iPhone
exclusive, whenever that may be. A study by Deloitte found that 50% of AT&T
iPhone users would like to switch to Verizon's network, which they perceive as
superior in quality, and a new Credit Suisse report estimates that AT&T would
lose 23% of its Apple customers, about 1.4m users, to its rival. Another
investment research house, TownHall Research, is even more gloomy on AT&T's
prospects, believing 50% will defect (both predictions are over the remaining
life of iPhone contracts, some of which will still have 18 months to run should
Verizon launch an Apple handset at the turn of the year).
However, while AT&T CEO Randall Stephenson has said in conference speeches and
FCC filings that about 80% of iPhone users are on family plans and "those
customers don't tend to churn", Credit Suisse thinks 3% of current iPhone users
would move immediately to the rival network, despite hefty penalties for
breaking the contract early.
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