Churn Intention by Major Carrier-MetaFacts
Will dissatisfied subscribers let their fingers do the walking?
A MetaFacts TUPdate by Dan Ness, Principal Analyst
An old western movie featured a cowboy who sold his horse several times throughout the film. After each sale, the cowboy would wander off and whistle and the horse would run back to the cowboy. The various new owners were upset, yet the cowboy claimed his horse had his own mind.
With the prospective merger of AT&T and T-Mobile, the biggest question is whether the customers will approve of the transaction and stay with the combined unit. Or, will they stray, perhaps back to Verizon or to one of the prepaid MVNOs?
One measure of a subscriber’s mindset is their intention to switch carriers upon the expiration of their contracts.
In our most recent wave of Technology User Profile, we found that both AT&T Wireless and T-Mobile contract subscribers report the highest churn intention rate of any of the major carriers. Close to one in four (23%) of T-Mobile’s online subscribers agree or strongly agree that they plan to switch carriers when their contract expires. Among AT&T subscriber base, this rate is nearly one-fifth at 19%. For comparison, Sprint’s rate is 18% and Verizon’s is 13%. These findings are based on responses from 5,054 online adults who use a mobile phone with a contract agreement, a subset of the entire Technology User Profile survey.
Also, churn intention rates were highest among both carrier’s Smartphone as well as Basic Mobile Phone subscribers.
If the merger were complete today, the combined customer base would have the highest churn intention rate. This is not fully comparable to independent rates, because some subscribers planning to switch likely considered switching from AT&T to T-Mobile or the other way around.
In other findings in our survey results, we’re seeing that the segments of customers AT&T has attracted are different enough from T-Mobile’s subscribers that it’s likely that both companies will need to create an assortment of campaigns to address the wide span of segments. Furthermore, this will rattle the positions of handset manfacturers from Motorola to Apple and RIM.
Of course, wireless carriers do all they can to sway subscriber’s churn intentions, and we’re likely to see creative efforts from both companies to entice subscribers to stay, just as competitors Verizon, Sprint, and others will do their best to welcome them into their fold.
So, we’ll all be keeping our ears open for the whistle which might draw subscribers back to Verizon, although some might instead follow the growing herd to prepaid alternatives.
The results in this TUPdate are drawn from the MetaFacts Technology User Profile Survey. Results specific to this topic can be obtained through a customized report and analysis. Or contact MetaFacts for the MetaFacts Technology User Profile Overview Edition report, which covers the broader range of key trends. View findings in 25 pages of executive summary analysis, 200+ pages of charts and graphs, all supported by 95+ pages of detailed tables. The complete, 300+ page report is delivered to you electronically. This edition is for the U.S. based on the 2010 wave of Technology User Profile gathered among a scrupulously selected set of representative respondents, surveyed both online and offline.
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