Security Failures Could Cause Churn as Much as High Prices Do

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Wireless customers are about as likely to change providers due to compromised security as they are for high monthly fees.

That's what next-generation security platform provider Crossbeam Systems found in a survey of more than 1,000 smartphone users in the U.S., U.K. and Germany, conducted by market research firm Opinion Matters.

Sixty-three percent of survey respondents cite high monthly fees as the primary issue that would drive them away from their current mobile network provider, with only 5 percent citing a lack of security; however, if survey respondents’ smartphones were to be compromised by hackers, malware or other security failures, 55 percent would consider changing providers and 19 percent would definitely change providers, Crossbeam said – leading to a potential exodus of 74 percent of customers.

This finding challenges network providers’ conventional thinking about their investment priorities, with most aggressively focusing on building ever faster high-speed network infrastructure and attractive data plans, but less on shoring up their security infrastructure and offering value-added security services and protection to end users and their devices, Crossbeam noted.

“Smartphone users, like most people, don’t think about the security of their devices until they’ve been hacked. This may be misleading mobile network operators to focus less of their attention on customer security and underestimate the risk it creates," said Peter Doggart, senior director of global marketing at Crossbeam. “There is an inadequate level of investment in security compared to other areas of the mobile network. This is a wake-up call for service providers, especially as we’re reaching a critical mass of smartphone users worldwide, not to mention the growth of data-enabled endpoints connecting to mobile phone networks, including smartphones, tablets, e-book readers and more. The quantity of threats directed at mobile devices and their level of sophistication are on the rise."

The survey also shows that 56 percent of respondents don’t know if their mobile network provider has measures in place to secure their smartphone. Despite this uncertainty, 42 percent of U.S. and 38 percent of U.K. smartphone users would still blame their network provider if their device or service were to be hacked, while 22 percent and 18 percent, respectively, would blame their smartphone manufacturer.

German smartphone users are much less likely to blame their network provider; almost half (45 percent) say they would blame themselves before their provider (21 percent), yet they would be just as likely to leave their provider as their U.S. and U.K. counterparts following a security breach.

Despite the majority of smartphone users’ concern with high fees, 53 percent of respondents expressed a willingness to pay their network provider additional fees to help improve security. Regionally, 59 percent of U.S. and 65 percent of German respondents would be willing to pay extra for security services, although almost two-thirds of U.K. respondents (63 percent) were against any type of additional fee.

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