Prepaid mobiles, increased choice cause for all-time-low global mobile customer loyalty: study

Mobile phone owners are breaking up with their carriers more often than ever before in the hope of finding a better deal elsewhere.

Today’s average mobile customer stays with the same service provider for approximately 27 months -- which is less than half the time most users spent with their mobile carrier a decade ago.  

The number of customers switching providers each year (a phenomenon dubbed “global mobile customer churn”) reached 44 percent at the end of last year, said market researcher Strategy Analytics in a report released on April 12.

Increased competition among service providers and a rise in the number of carriers offering prepaid mobile phones are just a few of the reasons global mobile customer churn is at its highest ever level.

Over the last five years the average prepaid customer lifetimes have halved to just 17 months.

“Prepaid churn has really been hit by promotional SIM card activity in developing markets, making customer loyalty virtually obsolete in some countries,” commented Phil Kendall, director, Wireless Operator Strategies at Strategy Analytics, and the author of the report. “For example, prepaid churn in Asia-Pacific is nearly 100 percent per year.”

In contrast, postpaid customers are much more likely to stick with their current provider.

Strategy Analytics said the “average postpaid customer lifetimes of 67 months have improved from the depths of the global recession in 2008/09, since customers show an increased propensity for upgrading with their current provider instead of switching to better deals elsewhere.”

If you’re unhappy with the rate your current provider charges and your contract has finished, you may be able to negotiate a better deal if you explain that you are considering switching to another company. This Yahoo! article provides a few cell phone contract negotiation tips.

The second thing you can do to keep your mobile bill down is to closely examine your contract before you sign. When purchasing a new device weigh the costs of buying the device outright and signing up for a month-by-month plan with the cost of a subsidized handset on a fixed contract.

Even though the initial outlay will be more expensive, it’s sometimes cheaper to buy a mobile phone outright if you’re not a huge data or voice call consumer -- plus it gives you the freedom to change carriers at any point in time if you find a better deal. This Lifehacker article weighs up the pros and cons of both options.

In an April 12 research note Credit Suisse Analyst Kulbinder Garcha said he expects the global smartphone market to reach the 1 billion-unit mark by 2014.

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