Connected Consumer Survey 2018: mobile customer satisfaction in the Middle East and North Africa

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1 Connected Consumer Survey 2018: mobile customer satisfaction in the Middle East and North Africa Karim Yaici

2 2 About this report This report focuses on aspects of Analysys Mason s Connected Consumer Survey that relate to the behaviour, preferences and plans of smartphone users in the Middle East and North Africa (MENA). In particular, it focuses on customer satisfaction, churn and retention-related aspects of mobile services. The survey was conducted in association with On Device Research between August and October The survey groups were chosen to be representative of the mobile-internet-using population in the region. We set quotas on age, gender and geographical spread to that effect. There were a minimum of 750 respondents per country, and 4500 in the region. GEOGRAPHICAL COVERAGE Middle East and North Africa Morocco Oman Qatar Saudi Arabia UAE KEY QUESTIONS ANSWERED IN THIS REPORT What are the drivers of mobile customer experience? How do they vary by country and by operator? What key factors influence consumers intention to churn? How have consumers priorities been evolving? What are the Net Promoter Scores (NPSs) of operators in MENA? Which companies lead and why? What is the role of bundling additional services on customer retention? How do new service-based pricing models affect KPIs? What is the relationship between customer service and customer satisfaction? WHO SHOULD READ THIS REPORT Operators strategy executives and marketing managers who are interested in understanding the needs of their consumer customer base, the different drivers of customer experience and the impact of differing approaches to pricing on customer satisfaction. Market intelligence and research executives in service providers that are responsible for understanding end-user trends and supporting business units in identifying and addressing new opportunities. Equipment/device manufacturers and software providers that want to identify end-user trends in service and device usage and help their operator customers to prioritise investments and improve their ability to address market opportunities.

3 12 The gap between incumbents and challengers in terms of customers propensity to churn shrunk between 2017 and 2018 in most markets in MENA One of the direct consequences of customer dissatisfaction is churn. The proportion of respondents that stated that they intended to churn within the next 6 months ranged from 19% (Ooredoo Qatar) to 29% (Maroc Telcom). The average across the operators surveyed (24%) is similar to that from 2017, but is still higher than that in Western Europe and Asia. It must be noted that intention to churn is not the same as the actual churn figures reported by the operators. The most notable change from the 2017 results is the smaller gap in intention to churn between customers of incumbent and challenger operators (with the exception of those in the UAE). For example, the intention to churn among Ooredoo s respondents in Oman dropped by 4 percentage points (pp) compared to that in 2017, and the same metric for Zain in Saudi Arabia fell by 7pp. This result is in accordance with the stronger NPSs achieved by these two operators in Price was the main driver of churn in Oman, Saudi Arabia and the UAE. This factor was cited most frequently by customers of Etisalat, STC and Omantel (34%, 32% and 30%, respectively). This might reflect consumers concerns about the cost of telecoms services as a share of their declining disposable income. Both poor network coverage and speed were consistently cited as reasons for churning. Ooredoo Oman and inwi received low scores for coverage; speed was most frequently cited by customers of Ooredoo Oman and Zain. 1 Please refer to the appendix for sample size and relevant survey questions. Figure 7: Percentage of customers intending to churn in the next 6 months, by operator, MENA, Figure 8: Churn rate and most cited reasons for churning, by country, MENA, Rank Rate Morocco Oman Qatar Saudi Arabia UAE 28% 26% 19% 26% 22% 1 Poor coverage Price Data allowance Price Price 2 Data speeds Data speeds Regularly change 3 Price Poor coverage Price Poor coverage 4 Roaming charges 5 Data allowance Data allowance Data speeds Data speeds Roaming charges Poor coverage Data allowance Data allowance Join network of friends/family Roaming charges Join network of friends/family Handset choice Source: Analysys Mason

4 16 Higher data allowances generally correlate with higher customer satisfaction, but this trend does not always hold at the individual country level Higher data consumption correlates with improved customer satisfaction in MENA, and those that consume the most data are generally the most likely to recommend their operators. Figure 11: Net Promoter Score by self-reported monthly data consumption, MENA, This linear relationship between data usage and customer satisfaction does not hold at the individual country level. For example, in Morocco, Qatar and Saudi Arabia, operators are struggling to increase their NPS as data consumption rises to the 2 10GB bracket. In some cases, high data users are not satisfied because they do not consider their large allowances to be good value. For MENA as a whole, the NPS given by customers in the 10 30GB allowance bracket was lower than that from those in the 5 10GB bracket. Customers on specific tariffs or data allowance tiers do not always get the value for money that they expect. Respondents with quasi-unlimited data allowances (more than 30GB) are the strongest promoters of their operators, despite the very high prices. 1 These high data levels suggest that consumers might tether to their smartphones to connect other devices so as to maximise the value of their subscriptions and to ensure that they use most of their allowances. This is positive news for operators as it means that most have succeeded in satisfying the needs of their high data user customers who are also likely to generate the most ARPU. 1 The highest NPSs were reported in Saudi Arabia where STC charges SAR350 (USD93) for a 100GB monthly data pack and in the UAE where Etisalat charges AED1000 (USD272) for the same allowance. 2 Please refer to the appendix for sample size and relevant survey questions.

5 Contents Executive summary Drivers of customer satisfaction and churn The impact of data usage and bundling Focus on digital experience Methodology and panel information About the author and Analysys Mason

6 30 About the author Karim Yaici (Senior Analyst) leads Analysys Mason s The Middle East and Africa regional research programme. His primary areas of specialisation include operators digital strategies, new telecoms opportunities and challenges, and consumer trends in growth markets. Prior to joining Analysys Mason, Karim was an associate analyst at Ovum, where he authored reports on mobile accessories and mobile applications. Prior to that, he worked as a research engineer at the Institute for Communication Systems and Vodafone. Karim holds an MSc in Information Systems Management from the University of Southampton and a PhD in human computer interaction from the University of Surrey.

7 31 Analysys Mason s consulting and research are uniquely positioned Analysys Mason s consulting services and research portfolio Consulting We deliver tangible benefits to clients across the telecoms industry: communications and digital service providers, vendors, financial and strategic investors, private equity and infrastructure funds, governments, regulators, broadcasters and service and content providers Our sector specialists understand the distinct local challenges facing clients, in addition to the wider effects of global forces. We are future-focused and help clients understand the challenges and opportunities new technology brings. Research Our dedicated team of analysts track and forecast the different services accessed by consumers and enterprises. We offer detailed insight into the software, infrastructure and technology delivering those services. Clients benefit from regular and timely intelligence, and direct access to analysts.

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