Category Archives: Churn

Why is there a best before date on mobile data?

Fresh milk and mobile data seem to share the same bacteria problem. Even if treated carefully, it eventually goes sour. To protect consumers from a possibly unpleasant experience, dairy producers put a best before date on milk cartons. Mobile operators go further – they revoke unused mobile data before those gigabytes have become a health hazard.

But consumers have started to question if unused data really is unhealthy and deserve a similar down-the-drain treatment as sour milk. Clever mobile operators realised that they can offer rollover data. One of the pioneers globally is New Zealand’s 2degrees. In this video they ask what is happening to all that leftover data.

So is this just another plug on rollover? It’s hardly new – we wrote about in already in January 2015. No, it’s not about rollover. Because even though rollover is a good thing, operators are still limiting it:

  • Saved data is voided after 1 month (as with e.g. Virgin Media)
  • Saved data is voided after 1 year (as with e.g. 2degrees)
  • You can save a maximum of 100 GB in your account (as with e.g. Telia, Hallon and Vimla in Sweden)
  • You can save 3x the monthly allowance (as with ‘3’ in Austria)
  • You can save as much as the monthly allowance (as with e.g. all Norwegian operators)

Let’s be clear: All of these implementations are of course still much better than no rollover at all – which is the case for a majority of operators worldwide.

But the business model is still to take something away that customers have bought – and sell it back.

Add-on data is often treated worse than regular data – albeit more pricey. If you run out of data a certain month, operators offer you to buy additional data – often at a premium compared to how much you paid for the data in your regular allowance. Whereas operators are broadcasting their pricing of regular plans, the information around add-ons is often well hidden.

But in many cases – UK’s Tesco Mobile and the two Swedish operators ‘3‘ and Telenor are some examples – add-on data expires at the same time as your monthly allowance, i.e. in less than a month. Let’s say your billing month ends the 25th. The day before, the 24th, you get an SMS stating that you’ve now run out of data. As you can’t imagine a life without it, you buy 1 GB of add-on data for 9.9 EUR. You actually just use 0.3 GB of that data but the remaining 0.7 GB is voided the day after, the 25th.

Some operators treat add-on data better: O2 and ‘3’ in the UK let it live for 30 days, Telia in Sweden for 31 days and Tele2 in Sweden for 6 months.

But even premium add-on data is eventually voided.

So also with add-on data, the business model is to take something away that customers have bought – and sell it back.

A vast majority of consumers – 76% to be exact – want their unused mobile data not to expire and instead roll over. This is shown in fresh research from Ericsson ConsumerLab.

But many operators have painted themselves into a corner as they have super-sized their mobile data buckets – relying on that the unused data anyhow is voided by the end of the month. France is a good example of the imbalance between buckets and consumption: The average French non-M2M SIM uses about 2.5 GB of mobile data in a month. But a 20 EUR per month plan in France comes with a bucket of 20 to 100 GB.

If the French operator Free – that offers 100 GB of mobile data on a stand-alone plan for 19.99 EUR per month – would allow customers to save unused data, their average 19.99 EUR customer (who consumed 8.4 GB of data per month by the end of 2017) would accumulate more than 1000 GB of unused data in a year. Yes, one terabyte.

This gives us one key to understand why unlimited mobile data suddenly has become popular among operators.

By leaving the bucket plan, operators that have painted themselves into the bucket inflation corner can jump out of it. Unlimited operators aren’t selling gigabytes. Therefore they do not need to get involved in the questionable practice of revoking unused gigabytes. They don’t risk having to refund unused data as e.g. Google’s Project Fi and UK’s Smarty (picture below) do.

Unlimited customers consume the data they consume and will no longer think about best before dates. It’s a relief for everybody.

The future lies in monetising customer satisfaction and customer loyalty, not in monetising gigabytes.

Six calls to action – directly from consumers

Ericsson ConsumerLab today published a new consumer and industry insight report titled Towards a 5G consumer future.

The research insights are based on a survey of 14000 Android and iOS smartphone users between 15 and 65 in fourteen countries: Argentina, Brazil, China, Egypt, Finland, France, Germany, Indonesia, Ireland, Japan, Mexico, South Korea, the UK and the US.

To prepare this consumer research, we worked with Ericsson ConsumerLab to analyse and benchmark the mobile data strategies of operators globally. When we had the research results, we jointly reviewed them.

The findings can be summarised in six calls to action – from consumers for operators: Continue reading Six calls to action – directly from consumers

Analysis and recommendations on mobile proposition refresh

Reference: Analysis and Go-to-market, 2017

Building and interactively presenting a comprehensive before/after analysis of international mobile propositions and their effects on customer intake, customer loyalty, revenue growth and data usage.

Emphasis on how to maximise the effect of e.g. unlimited data, zero-rated services, group & family plans and time-based offers in post- and prepaid propositions. Mapping the propositions to customers segments with a reward-for-wanted-behaviour logic balancing between general availability and segment exclusivity. Continue reading Analysis and recommendations on mobile proposition refresh

Carriers moved away from subsidizing handsets. Now they subsidize customers’ video consumption.

Mobile operators are abandoning the previously predominant model to subsidize handsets and to, in return, lock customers in on long contracts with elevated service fees.

The death of the model should be mourned by no one since end-users have been given choice and flexibility through a multitude of non-binding, cheaper and flexible service options with generous – or even unlimited – allowances. Operators have seen customer churn decrease as end-users hold onto their handsets longer. As a direct consequence, EBITDA margins have increased.

Investors might still complain about the revenue growth, but measured as percentage of revenue mobile carriers currently produce the best margins on record. Continue reading Carriers moved away from subsidizing handsets. Now they subsidize customers’ video consumption.

Bundles and churn: Nexterday North 2017

Also the 2017 version of Nexterday North was a true ‘anti-seminar’ with futuristic and insightful speakers in a great, sometimes quirky, mix. May Comptel‘s spirit thrive also now that it is a part of Nokia.

This year, tefficient held a keynote presentation focused on bundles and the effect on churn.

Continue reading Bundles and churn: Nexterday North 2017

2016 was a great year for mobile customer loyalty

The fourth quarter has traditionally been the most difficult for mobile operators in mature markets. Many customers join, but many others are leaving and operators typically dilute margins by having more equipment (and more expensive equipment) in the sales mix compared to the rest of the year.

Subscriber acquisition and retention costs are generally higher in the fourth quarter when the financial discipline of mobile operators is put aside to promote equipment at prices well below the operator purchase costs – as long as existing customers promise to stay or new customers are ready to commit to plans with high monthly fees.

But even though there are temporary setbacks, our industry is gradually moving in a more rational direction: Equipment subsidisation is less frequent today and many operators have stopped binding customers to long, inflexible, contracts. Mobile operators have developed their service offerings and are today capable of explaining why customers should stay – without having to throw in a new iPhone as part of the package. Continue reading 2016 was a great year for mobile customer loyalty

Nonstop Retention benchmark and European quad-play best practice

Analysis and Go-to-market, 2016

Nonstop Retention® benchmark: Calculating and comparing the Nonstop Retention Index for mobile brands (MNOs, sub-brands and main MVNOs) in one specific major European market. Identifying best practice and showing current trends. Recommending propositions and actions to improve customer loyalty per brand.

European quad-play best practice: Fact-based before/after analysis of how the introduction of quad-play propositions changed key business Continue reading Nonstop Retention benchmark and European quad-play best practice

The battle of 2017: Content ownership vs. unlimited mobile data

welcome-to-nexterday-2

Nexterday North 2016 was an as fantastic experience as the first, inaugural, anti-seminar in 2015. Once again, Comptel managed to bring 550 thinkers and doers from around the world to Helsinki and create great buzz around it.

This year, tefficient wasn’t helping Comptel with a keynote presentation. Instead we prepared and hosted two square table sessions for registered operator representatives only. Continue reading The battle of 2017: Content ownership vs. unlimited mobile data

Upsell and loyalty strategies of operators: Using public Wi-Fi as customer magnet

Wi-Fi as customer magnetIn this analysis – our fifth on the subject – we show how telcos, cellcos and cablecos in mature markets in Europe, America and APAC use public Wi-Fi to attract and retain customers – and to upsell.

We also update you on Wi-Fi usage and deployment. You might be surprised to see that the wide adoption of 4G LTE and an increasing use of mobile data meant more Wi-Fi, not less. Continue reading Upsell and loyalty strategies of operators: Using public Wi-Fi as customer magnet

Analysis of the development of mobile data monetisation in a specific country

Analysis, 2016

Analysis of the mobile market in a specific country: Development of market shares, subscription tiers, churn, offerings, pricing, data usage, revenue, ARPU, margin, network coverage and CAPEX for all operators.

Special focus on the development of mobile data monetisation and mobile TV/video over time.

Comparisons done to other countries.

Commissioned by a global solutions provider.