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Increased Smartphone Usage Driving up Subscriber Churn Rates

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Nokia Siemens Networks says that it has identified that customer intent to churn in the UK, Germany and the USA due to dissatisfaction with network quality has grown significantly over 2008 levels.

"In mature markets, where mobile broadband and smartphones have recently taken off, customer loyalty is lowest," said Michael Matthews, head of strategy and business development at Nokia Siemens Networks. "The silver lining in our findings, however, is that price is becoming less critical as a churn trigger. Without a doubt, access to mobile broadband has changed people's priorities and the expectations they have of their service providers."

"Now it's the experience people have - how happy they are with the service they're getting - that's key to attracting and retaining subscribers. People are asking: How good's the coverage? How clear are my voice calls? Do I get a connection when I want one? Are my messaging services simple and flexible? And, increasingly, how accessible and fast is my Internet connection?", added Matthews.

The study reveals that in the UK, 45% of the negative experiences people have with their mobile can be explained by network quality falling below expectation. This may be attributable to the recent steep increase of smartphones in the network, which can cause a rapid increase in signaling traffic that has the potential to cause network congestion for all subscribers. The study results were similar in the USA and Germany, and, unless the issue is proactively addressed, it's only a matter of time before emerging markets around the world have same issues.

Already, the global impact of network quality on subscriber retention stands at 34%, far higher than in previous years.

Many operators around the world are already taking action to improve the quality of experience for their subscribers. Nokia Siemens Networks recently completed the London Experience Project with Telefónica O2, in which the company optimized the network for smartphones by minimizing the signaling load. The O2 network has now been verified by the British Approvals Board for Telecommunications as the "fastest mobile broadband" network in London.

Methodology

More than 20,000 consumers are interviewed for the study across 17 countries covering mature markets and highly competitive emerging markets.

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Tags: nokia siemens networks  churn  congestion  usa  UK    Germany