Telefónica, DT Poised to See Mobile Churn Problems in 2012

By Craig Galbraith Comments
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Ongoing economic struggles and tougher regulations will bring on more customer churn for carriers in Europe.

That's one finding in Yankee Group's look ahead to the new year, “2012 Mobility Predictions: A Year of Living Dangerously." The analyst firm says the net effect will be an increase of 0.1 percentage points in average monthly churn rates in Western Europe during 2012. This means churn will increase from approximately 2.3 percent per month today to 2.4 percent by the end of 2012. That may not seem like a lot, but in subscriber numbers, this translates into almost 7 million additional customers in Western Europe switching their mobile provider during 2012.

Yankee Group expects Greece, Italy, Spain, Portugal and Ireland to be most impacted by economic problems in 2012, but the U.K. and France will also struggle with higher unemployment a decline in consumer confidence. It's anticipated that customers will optimize their mobile consumption behavior in an attempt to minimize their monthly spend. Europeans will also search for better-value mobile services, and this will lead many to switch to value-oriented operators or mobile virtual network operators (MVNOs), the study says. The last recession, which started toward the end of 2008, contributed to an increase in mobile subscriber churn as well.

“Unfortunately, this uptick in subscriber churn will happen despite operators’ ongoing efforts to migrate customers to postpaid services and long-term contracts linked to new smartphone purchases," said Declan Lonergan, research VP at Yankee Group. “In this scenario, we see MVNOs and value-oriented operators such as Virgin Mobile, Lebara Mobile and Yoigo as winners, while traditional incumbents like Telecom Italia, Telefónica and Deutsche Telekom are slated to lose out."

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