Surprise! Contract mobile customers less loyal than prepaid.

Stuart Corner
Monday, 30 January 2006 09:00

IT Industry - Strategy

Nokia has released the results of a study that, it claims, "unearths some of the key factors that drive subscribers in choosing or changing their [mobile] service provider."
 
  The study - which covered 3,900 consumers across the UK, US, Germany, Thailand and Brazil - found that there were five "essentials" that had the most direct impact on customer acquisition: calling plans, operator brand image, handset aspects, network quality and cost aspects.
 
It showed that the direct significance of "cost issues" was much lower when it came to retaining customers than when acquiring theme. "When it comes to keeping customers, factors such as brand image, network quality, and switching barriers come ahead of cost related issues like calling plans," Nokia claimed.
 
Nokia says some of the results were surprising. For example, contract customers appear less loyal than pre-paid customers, despite the stronger contractual ties they have to their operator. "One reason for this could be the fact that contract customers are more receptive to new extended offerings (subsidised handsets, special deals, etc) which can trigger churn," it suggests.