Churn and revenue loss are significant dangers for wireless operators in Europe offering vanilla prepaid services, a new survey has found. They're also missing out on an opportunity to know more about their users, a notoriously difficult task in the prepaid world.
Evolving Systems polled the views and opinions of 500 prepaid mobile phone subscribers across the U.K., France, Germany, Italy and Spain, and found that a failure to offer number choice and other personalized services can translate to a significant proportion of their prepaid subscribers defecting to their competitors. Unlike in the United States, prepaid in Europe is not a strictly credit-challenged and youth segment; a large portion of wireless subscribers are prepaid and demand the same flexibility and innovation that postpaid users do.
According to the research, at least 35 percent of respondents in every country, and significantly more in France and Germany (44 percent in both), would consider switching to another service provider if it were able to offer them the ability to select a number and their current provider was not. The main reason respondents gave for wanting to choose a number was to make it easier to remember and 32 percent or more of respondents in each country said they would be prepared to pay in order to choose a number.
The survey also found that at least half of respondents in all of these countries, rising to 62 percent in Italy and Spain and 55 percent in France, would consider switching to another provider if it were able to offer a range of personalized services and their current provider was not. The survey asked respondents about their interest in, and concerns about, a range of personalized services, including loyalty schemes and innovative two-sided business models, such as sponsored and advertising-supported services.
“Leading operators in the surveyed countries already have blended churn rates of well over 30 percent a year, a number that could get worse if they fail to offer their customers number choice and other personalized services and a competitor does,” said Stuart Cochran, CTO at Evolving Systems. “The challenge for operators is how they engage effectively with subscribers in order to drive up loyalty levels.
Historically, this has been difficult. Typically, operators have had little, if any, information about a large proportion of their customer base, prepaid users,” added Cochran. “As a result, operators are forced to look at usage trends and patterns of behavior to infer, sometimes inaccurately, the type of customer they are dealing with.”
Evolving Systems sees the results as increasing the value proposition for dynamic SIM allocation (for which it offers a solution). This allows customers to personalize their services when they use a mobile device for the first time, to pick their number or choose the right tariff, so operators can create a new dialogue with prepaid users.
“Critically, the dialogue presents an ideal opportunity to build a better understanding of customers,” adds Cochran. “The same device-based dialogue that supports number choice can also be used to sign up new customers to reward or loyalty programs, or to offer new value-added services. Through this, operators can strengthen the customer relationship, build loyalty and reduce the potential for churn revealed by our survey results.”
