Study shows potential US telecoms churn

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By: Wise Marketer Staff |

Posted on July 8, 2003

The USA currently has 39 million mobile telephone users who are ready and willing to switch providers if they receive a better offer, according to a nationwide user study from The Management Network Group (TMNG). The study also examines the potential churn effect of WNP (wireless number portability).

With the study's conclusion that a massive number of telephone users (both fixed line and wireless) are ready to switch providers, the situation represents both opportunities and risks for service providers.

"Service providers must immediately ensure the impact on operating expenditures is minimised," noted TMNG's CEO, Rich Nespola. "That starts with a top-down review of the service-delivery process. They also have to become operationally excellent as both importers and exporters of customer accounts."

Massive churn to come
Perhaps the most surprising finding of the study is that 16.7% of survey respondents said they would probably or definitely switch their current home phone number to a wireless phone if they could take their existing number with them. That represents some 9.1 million telephone lines that could potentially shift to wireless services once WNP becomes available in late November 2003.

In terms of wireless churn, 6% of wireless users (8.7 million, out of the current 146 million users) said they are ready to switch to a different wireless provider the day after WNP is made available. Meanwhile, fully 27% (39 million users) said they would switch providers as soon as they received a better offer.

Service quality
With call quality and billing problems topping the list of complaints, more than half of those who have had problems in the past year said they were ready to switch carriers.

"Delivering quality service remains the competitive differentiator that determines who wins and who loses," Nespola added. "And wireless users also indicated a higher propensity to stay with their provider when additional features like loyalty programmes, push-to-talk, and web access are included in their plans."

TMNG's Wireless Number Portability Study examined the opinions of over 2,700 telephone users, and was conducted in May 2003 in order to gauge the impact of forthcoming WNP options.

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