Smartphones encourage mobile user churn
Owners of high end handsets are the least loyal, bad news for AT&T
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.