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Perception, Reality and How LTE Will Drive Mobile Subscriber Loyalty

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Timo AhomakiBy Timo Ahomäki

What makes a mobile customer loyal? What makes them switch operators? And how can we reduce churn? What will LTE mean for loyalty? The answers to all these questions are the subject of the first of three Tecnotree whitepapers.

The findings are based on research conducted by On Device Research and mobileSQUARED in February 2013. What’s clear is that mobile operators still don’t appreciate how their customers tick. One of the research’s main findings is the disconnect between what drives customer loyalty and churn and what mobile operators believe makes them keep (and lose) customers.

So if you are an operator take note: Consumers focus on one aspect of their mobile service, be that device, tariff or network coverage, when choosing to stick or switch, whereas mobile operators believe that it’s a collection of issues that drive loyalty and churn, positively and negatively, respectively.

The good news is that consumers consider themselves to be loyal – more than 90 percent surveyed claim they are; however, more than one-fifth have changed mobile operators in the last six months, and a similar number intend to switch operators in the coming months. This means that at any one time, there is a settled subscriber base of 50 percent. However, the research also reveals that the longer a customer stays with an operator, not only does their loyalty increase, but their spend on non-communication services also goes up – by more than 20 percent for almost one-fifth of subscribers, which can only be positive.

But in addition to highlighting the role that better devices and better tariffs play in driving loyalty, the research also revealed that the ultimate weapon in an operator’s arsenal will be the provision of 4G, with almost 60 percent of consumers claiming they would move mobile operators to access 4G connectivity. 

This means that if a mobile operator is not the first to market with 4G, it will need to be talking about LTE to its customers now. It will also need to be sharing its rollout plans for LTE with them, and letting them know when they can expect to use superfast broadband, so they know when they can access it. This in turn will assist loyalty, and drive consumer spend on non-communication services, which is good news for operators.

What’s clear from this report is that operators need to ensure they are continually being innovative and competitive – whether with tariffs, services and even the handsets they offer to loyal subscribers. This is where really knowing the individual subscribers counts so that operators can offer those relevant and real-time deals that acknowledge each customer’s worth.

To read the "Unravelling what makes a mobile customer loyal" whitepaper in full, click here.

Timo Ahomäki is CTO, Tecnotree Corporation.  

**Editor's Note: The whitepaper was unveiled this week at Mobile World Congress in Barcelona.**

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