PR releases

Mobile operators don't get it right when trying to reduce "churn"

London, UK, 14th August 2006: Mobile operators must focus on minimising churn, and maximising customer retention by simply fixing the basic problems such as customer relations, before trying to upsell high ARPU users.

If operators fail to achieve this, they will hardly recover the costs of platform development and performance upgrades, according to new research from Informa Telecoms & Media.

The Minimising Mobile Churn Strategic Report’s exclusive Industry Survey carried out in May 2006 survey provides a snapshot of industry opinion at a time when churn happens to feature quite highly on many operators’ agendas. The fact that a large proportion of participants (almost half) came from so-called emerging markets demonstrates that the market has evolved.

According to Ezequiel Dominguez, author of the report, "some lessons have been learned from operators competing in more mature markets - not least is the realisation that churn needs to be addressed early on in an operator's lifecycle so that it does not escalate when falling net additions numbers really begin to flatten growth."

Dominguez went on to say that "managing churn is best achieved in an environment where growth is planned and targeted at well-defined customers i.e. niche markets and communities.

Operators must ensure that the type of customer is carefully identified and targeted against each proposed service. Then customers should be placed in micro-segments and followed through with a well planned customer centric relationship management strategy."

The overwhelming conclusion from the aforementioned survey is that operators believe churn still represents a growing problem. In qualifying this, the industry also feels that annual churn figures have risen in the last two years - reinforcing the notion that churn is a growing problem.

It seems that operators have set themselves tough goals in terms of achieving desirable churn levels. The vast majority of respondents (75%) said an acceptable level of annual churn would be 15% or less.

Mobile number portability is still high on the agenda, with more than half of the respondents stating that they believed the introduction of MNP to have a big impact on churn levels, although loyalty schemes are not widely seen as having a 'big' impact on retaining costumers.

The marketing department is no longer singled out by respondents as the one department which should really be driving forward churn management. On the contrary, it was recognised that every department has some responsibility if the strategy is to work.

The key is to accept that current marketing methods are part of the problem and simplify hugely overcomplicated products and tariff structures. Most operators fail to see their product and service offering from the customer's point of view. It is very encouraging that such a large percentage of operator respondents (77%) said that they had implemented some kind of churn reduction strategy in the last two years.

ABOUT MINIMISING MOBILE CHURN REPORT

Minimising Mobile Churn Strategic Report from Informa Telecoms & Media analyses the real factors determining customer satisfaction and establishes the key issues in reducing churn and achieving optimum loyalty and retention strategies. It provides an evaluation of the global telecoms market with specific reference to the impact of churn and the resulting decline in revenues. The report addresses and provides guidance on how to tackle churn in terms of business processes and through the use of available software solutions. Click the link below for more information:

http://telecoms.msgfocus.com/c/12EQWSkYLzD0qYoSZ

About Informa Telecoms & Media Informa

 Telecoms & Media is the leading provider of business intelligence and strategic marketing solutions to global telecoms and media markets. Driven by constant first-hand contact with the industry our 90 analysts and researchers produce a range of intelligence services including news and analytical products, in-depth market reports and Datasets focused on technology, strategy and content.

Informa Telecoms & Media also organizes more than 125 annual events, attended by more than 70,000 executives. In addition to the GSM>3G World Series, our events cover subjects as diverse as fixed and mobile operator strategy, technology, TV, mobile music and games.