U.S. Mobile Consumers and Churn: Who is churning and why? Market Study First Quarter, 2017

Transcription

1 U.S. Mobile Consumers and Churn: Who is churning and why? Market Study First Quarter, 2017

2 U.S. Mobile Consumers and Churn: Who is churning and why? Market Study Published First Quarter, 2017 Version 1.0 Report Number: 1Q igr Inc W. Hwy 71 Suite 350 PMB 341 Austin TX 78738

3 Table of Contents Abstract... 1 Executive Summary... 3 Churn Rates... 3 Figure A: Postpaid Churn Rates for Q (Sprint s Q3 FY 2016)... 3 Figure B: Postpaid Churn Rates for 2006 to Figure C: Amount of Time with Current Mobile Service Provider... 5 Switchers Behavior... 5 Figure D: Less than One Year with Mobile Service Providers... 6 Figure E: Reasons for Switching Mobile Service Providers... 7 Stayers Behavior... 7 Figure F: Reasons for Staying with Current Mobile Service Provider... 8 Stay Because of Good Network and Coverage Compared to Perceived Ranking... 8 Stay Because of Good Customer Service Compared to Perceived Ranking... 9 Triggering Churn... 9 Figure G: Reasons Subscribers Might Change Providers Methodology Mobile Operators and Churn Table 1: Postpaid Churn Rates for Q (Sprint s Q3 FY 2016) Figure 1: Postpaid Churn Rates for Q (Sprint s Q3 FY 2016) Table 2: Postpaid Churn Rates for 2006 to Figure 2: Postpaid Churn Rates for 2006 to Mobile Consumers and their Providers Current Mobile Provider Table 3: Amount of Time with Current Mobile Service Provider Figure 3: Amount of Time with Current Mobile Service Provider Current and Previous Mobile Providers Table 4: Current and Previous Mobile Service Providers Figure 4: Current and Previous Mobile Service Providers Always with the Same Mobile Provider Table 5: Subscribers of Only One Provider Figure 5: Subscribers of Only One Provider Drivers of Churn Advertising and Promotions Awareness of Promotions Table 6: Awareness of Advertising and Promotions Figure 6: Awareness of Advertising and Promotions Likelihood to Follow Up Table 7: Likelihood to Act on Advertising and Promotions Figure 7: Likelihood to Act on Advertising and Promotions Leverage to Get a Better Deal Table 8: Using Other Providers Promotions Distribution of this report outside of your company or organization is strictly prohibited. Copyright 2017 igillottresearch Inc.

4 Figure 8: Using Other Providers Promotions Got a Better Deal Table 9: Success in Using Other Providers Promotions Figure 9: Success in Using Other Providers Promotions TV and Home Internet Services Use AT&T Internet or TV but not AT&T Wireless Table 10: Use AT&T Internet or TV but not AT&T Wireless Figure 10: Use AT&T Internet or TV but not AT&T Wireless Use AT&T Internet or TV and AT&T Wireless Table 11: Use AT&T Internet or TV and AT&T Wireless Figure 11: Use AT&T Internet or TV and AT&T Wireless AT&T and DirecTV Table 12: Awareness of AT&T Acquisition of DirecTV Figure 12: Awareness of AT&T Acquisition of DirecTV Table 13: Likelihood to Switch Due to AT&T Acquisition of DirecTV Figure 13: Likelihood to Switch Due to AT&T Acquisition of DirecTV Table 14: Likelihood to Stay with AT&T Wireless Due to AT&T Acquisition of DirecTV Figure 14: Likelihood to Stay with AT&T Wireless Due to AT&T Acquisition of DirecTV Consumers Perceptions of Mobile Operators Services Ranking of Network Quality Table 15: Ranking of Network Quality by Provider Figure 15: Weighted Ranking of Network Quality by Provider Ranking of Customer Service Table 16: Ranking of Customer Service by Provider Figure 16: Weighted Ranking of Customer Service by Provider Ranking of Pricing Table 17: Ranking of Pricing by Provider Figure 17: Weighted Ranking of Pricing by Provider Why Mobile Consumers Have Switched Operators Previous Mobile Providers Table 18: Amount of Time with Previous Mobile Service Providers Figure 18: Switchers Amount of Time with Previous Mobile Service Providers Figure 19: Less than One Year with Mobile Service Providers Why They Switched Table 19: Reasons for Switching Mobile Service Providers Figure 20: Reasons for Switching Mobile Service Providers Do They Expect to Find a Better Deal? Table 20: Expectations for a Better Deal Figure 21: Expectations for a Better Deal Why Mobile Consumers Have Stayed with Operators Reasons Subscribers Have Stayed Table 21: Reasons for Staying with Current Mobile Service Provider Figure 22: Reasons for Staying with Current Mobile Service Provider Table 22: Reasons to Stay with Current Mobile Provider by Provider... 45

5 Figure 23: Reasons to Stay with Current Mobile Provider by Provider Stay Because of Good Network and Coverage Compared to Perceived Ranking Table 23: Subscribers Who Stay for Network and Rank Their Provider as Best Figure 24: Subscribers Who Stay for Network and Rank Their Provider as Best Specific Good Network and Coverage Reasons Table 24: Specific Important Aspects of a Good Network Figure 25: Specific Important Aspects of a Good Network Stay Because of Good Customer Service Compared to Perceived Ranking Table 25: Subscribers Who Stay for Good Customer Service and Rank Their Provider as Best Figure 26: Subscribers Who Stay for Good Customer Service and Rank Their Provider as Best Reasons Subscribers Might Change in the Future Table 26: Reasons Subscribers Might Change Providers Figure 27: Reasons Subscribers Might Change Providers Number of Customer Service Issues Subscribers Will Tolerate Table 27: Number of Billing or Customer Service Issues Needed for Change Figure 28: Number of Billing or Customer Service Issues Needed for Change Tolerance for Network Quality Issues Table 28: Number of Network Quality Problems Needed for Change Figure 29: Number of Network Quality Problems Needed for Change Amount of Monthly Bill Decrease Needed Table 29: Amount of Monthly Bill Decrease Needed for Change Figure 30: Amount of Monthly Bill Decrease Needed for Change Amount of Monthly Rate Increase Needed Table 30: Amount of Monthly Bill Increase Needed for Change Figure 31: Amount of Monthly Bill Increase Needed for Change Consumer Demographics Demographic Profile of U.S. Consumer Respondents Table 31: Respondent Age Figure 32: Respondent Age Table 32: Respondent Gender Figure 33: Respondent Gender Table 33: Respondent Ethnic Background Figure 34: Respondent Ethnic Background Table 34: Respondent Annual Household Income Figure 35: Respondent Annual Household Income Table 35: Respondent Level of Education Figure 36: Respondent Level of Education Table 36: Age of Children in Household Figure 37: Age of Children in Household Table 37: Respondent Region Figure 38: Respondent Region... 67

6 Table 38: Respondent Marital Status Figure 39: Respondent Marital Status Definitions General Device Types Services Network Technology About igr Disclaimer... 75

7 Abstract Churn rates, which indicate the percentage of subscribers that end their service, are an important metric used to rate the performance of U.S. mobile operators and are regularly reported in mobile operators quarterly results. Because the overall number of mobile subscribers is no longer growing in the saturated U.S. mobile market, service providers must lure subscribers away from another provider if they want to grow their subscriber base, and when a subscriber moves from Operator A to Operator B, the churn rate of Operator A obviously suffers. As churn rates are very important, many in the industry want to know why mobile subscribers churn. How do advertising and promotions, price, customer service, network quality, retail locations, and other non-mobile services offered by a provider affect subscribers likelihood to stay with or leave their mobile service provider? In addition to looking at the possible causes of churn, in this market study igr also analyzes the churn rates for the major U.S. mobile operators, the current churning behaviors of U.S. mobile consumers, such as how long they have been with their current and previous providers, and U.S. consumers perceptions of the network quality, pricing and customer service of the major operators. The data in the study is based on a web-based survey of more than 1,000 U.S. mobile consumers that igr fielded in March, When appropriate, the market study also compares results to those that igr found in its November 2015 survey, which were published in a market study in the first quarter of Key questions addressed: What are the churn rates of the major U.S. mobile operators? What percentage of U.S. mobile consumers have been with their current service provider for less than one year? More than one year? More than two years? What percentage of U.S. mobile consumers have been with only one service provider? How do advertising and promotions affect U.S. mobile consumers likelihood to switch providers? How do bundled services, such as AT&T U-Verse and DirecTV, affect U.S. mobile consumers likelihood to switch providers? How do U.S. mobile consumers perceive the network quality, pricing and customer service of the major U.S. mobile operators? How could this perception affect their likelihood to churn from their current provider? Why did U.S. mobile consumers who switched operators in the last year do so?

8 Why do U.S. mobile consumers who have stayed with their operator for more than one year do so, and is there anything that might make them change in the future? Who should read this report? Mobile network operators Mobile service retailers and distributors Financial and investment analysts.