Telecom subscriber churn in the global wireless industry reached 2.8 percent per month in Q2 2018, the lowest level since Q1 2009.
The low churn rate was driven by strong performance in post-paid churn and pre-paid churn level not seen since 2007, a Strategy Analytics report.
Content bundling, multi-play, and digital self-service options are key to improving customer loyalty in the wireless market.
India and the US have seen strong churn improvements in 2018. The entry of Reliance Jio, a 4G service provider targeting consumer telecom market, was one of the main reasons for the low churn in India.
Reliance Jio, a telecom operator owned by Mukesh Ambani, competes with Airtel, BSNL and Vodafone India, the four-operator market with more than 1 billion mobile phone customers. Airtel, Vodafone Idea and BSNL opted for several schemes to retain their mobile subscriber base and high ARPU customers.
T-Mobile and Sprint achieved post-paid gains in the US. T-Mobile, which is considering a $26 billion merger with Sprint, is competing mainly with Verizon and AT&T, to gain in the US wireless services market. Verizon and AT&T did not have other options to compete with T-Mobile and Sprint to retain their customers.
Loyalty incentives, exclusives and freebies feature in many mobile service providers’ retention strategies.
The biggest churn wins come in the area of empowering customer self-service through digital account management tools and through multi play service bundling,” Phil Kendall, executive director Service Provider Group at Strategy Analytics.
Service provider Belgium’s Proximus has shown that quad play churn can be 8-10x lower than single play churn.
Operators are seeing results from use of broad loyalty tools, like digital self-service or service bundling, which have value right across the service provider business.
Mobile operators need to focus on identifying which offers can target the segments where a churn reduction is the most valuable using consumer research as well as predictive analytics to develop more relevancy.
“Giving a free Netflix or Spotify subscription to a customer who will churn anyway is as pointless as giving it to a customer who shows no indication of ever churning,” Susan Welsh de Grimaldo, director Service Provider Strategies, Strategy Analytics, said.
BSNL, a state-run telecom operator, today announced free Amazon Prime subscription to some of its broadband and pre-paid customers.