13% Of U.S. Adult Wireless Users Switched Service Providers in the Past Year.

Low levels of customer satisfaction have led to challenges for wireless service providers (WSPs) as 13 percent of U.S. adult wireless users have switched their WSP in the last twelve months. Of concern, an additional 13 percent probably or definitely will switch providers within the next year with another quarter (23%) considering a switch.

These are some of the results from The 2004 Telecommunications Report, a study conducted quarterly by Harris Interactive®. The most recent study was conducted in September 2004 among a sample of 1,105 U.S. adults of whom 836 are mobile phone users.

Only one in four (24%) U.S. adult wireless users is highly satisfied with their wireless service provider. In contrast, 45 percent of U.S. adults are as satisfied with their wireline (landline) telephone provider and 42 percent with their Internet service provider.

Why are people switching and what can WSPs do to address this issue?

Price and promotion are the factors!

Cost is the leading driver of churn by a 2-to-1 margin over reliability. More than two in five (44%) U.S. adult wireless users who have switched providers report the primary reason they left their previous WSP was for a better price on a monthly service plan, and 12 percent switched because of a promotion or sale offered by a new provider. One in five (22%) cite improved reliability as the primary reason for switching.

What can help?

With price being the primary reason for switching WSP’s, it is not surprising that half (51%) of U.S. adult wireless users who are considering a switch from their current mobile carrier report that if their provider reduced the price of their current plan they would not switch. According to the survey, other actions WSP’s could take in order to prevent their customers from switching are to: increase the amount of minutes on current plans (33%), offer a better family plan (23%), and/or include additional product features (20%) – these can include such items as speaker phones, the ability to send and receive email, and voice command – all considered “must-have” features by consumers who use wireless phones.

One avenue WSP’s could explore is to lock consumers into longer contracts. However, price is still a leading factor when deciding on type of contract. The majority of consumers with two-year wireless contracts says they chose the contract because of promotion (49%) and/or price (24%) – as opposed to being confident they will remain with their WSP (18%). In addition, there are wireless users without a contract who instead have prepaid plans (11%). Of those, 42 percent say they chose this type of plan in order to avoid a lengthy contract.

Another avenue WSP’s could explore is to increase minutes offered in plans. However, this may not help as cell phone usage time has steadied, with 59 percent of users reporting they use their mobile phone about the same amount of time as they did one year ago.

Joe Porus, chief architect, Harris Interactive Technology Research, says, “Wireless service providers will need to find ways to turn these challenges into opportunities in order to remain competitive. Some may choose to address satisfaction levels in more traditional ways in an effort to retain customers while others may venture into new technology, such as wireless data applications or Internet telephony; still others may try a combination of these. One thing for sure is that with the rapid change seen within the telecommunications industry, providers need to think fast and think smart.”

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