Customers switch providers more frequently

Telecom Lead Asia: The average mobile customer switches
service provider every 27 months, more than twice as frequently as a decade
ago. Customers switching providers each year have reached to its highest ever
level last year at 44 percent.


Strategy Analytics said average prepaid customer
lifetimes have decreased over the last 5 years, to only 17 months.


Prepaid churn has really been hit by promotional SIM
card activity in developing markets, making customer loyalty virtually obsolete
in some countries. For example, prepaid churn in Asia-Pacific is nearly 100
percent per year. It doesn’t cost much to push new SIM cards into the market,
however, operators would still benefit by promoting targeted offers to existing
users which build longer-term, more valuable, customer relationships,” said
Phil Kendall, director, Wireless Operator Strategies, and author of the report.


However, average postpaid customer lifetimes of 67 months
have improved from the depths of the global recession in 2008/09, since
customers show an increased propensity for upgrading with their current
provider instead of switching to better deals elsewhere.


With smartphone subsidies stretching operator resources,
it is the postpaid market where churn is more expensive to manage. Operators
are finally looking at new device purchasing models, like installment plans or
leasing that can alleviate pressure. Of course, consumers are ‘addicted’ to the
discounted handset model–and it will be difficult to change this,” said Sue
Rudd, director, Service Provider Analysis.


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