Churn continues upward trend

Mobile operators face an increasing struggle to hold onto their customers, according to research from Strategy Analytics this week.

On a global basis, the rate of subscriber churn posted its ninth consecutive quarter of annual growth, reaching 2.5 per cent per month in the first three months of the year.

According to the researcher, the main culprit for this increase is subscriber volatility in emerging markets.

“Subscriber registration and re-verification procedures have highlighted the challenge of real subscriber growth in a number of emerging markets over the last few quarters,” commented Phil Kendall, director of Global Wireless Practice at Strategy Analytics.

“Operators in Malaysia were forced to disconnect nearly 20 per cent of their prepaid subscribers at the end of 2006 as part of their drive to register all mobile phone accounts. Additionally, India’s Reliance Infocomm disconnected nearly six million of its 30 million customers in the first quarter.”

Churn is relatively stable in Europe and North America, but continued to increase in Asia Pacific, Central and Latin America, the Middle East and Africa, according to the firm.

David Kerr, vice president of Global Wireless Practice, added: “The increase in churn highlights the challenge of managing subscriber growth in many prepaid-centric emerging markets. In these markets, where new connections involve simply placing a new SIM card into one’s existing handset, competitive activity is having an increasingly detrimental impact on subscriber behavior and churn levels.”

The firm’s findings are based on tracking the operational and financial performance of 125 individual operators, accounting for 75 per cent of the world’s cellular users.

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