Lengthy contracts that help limit upfront costs less appealing to consumers

New Parks Associates researchshows that unused data rollover and free access to premium Wi-Fi hotspots are appealing and useful tools for a mobile operator in attracting consumers planning to switch their mobile service in the next 12 months. 360 View Update: Mobile Data Consumption and Preferencesalso reveals that 60% of those potential switchers rate a rewards program for being a loyal customer as very important when considering a service provider.

“The U.S. mobile service market has grown intensely competitive over the last three years as growth in new smartphone subscribers tapers off,” said Harry Wang, Senior Director of Research, Parks Associates. “U.S. operators have ramped up incentives to lure subscribers from competitors and encourage their own to stay longer—their game plans have switched gears from ARPU growth to churn management.”

Parks Associates’ 3Q 2015 research shows the two-year contract, as a means to lower upfront costs, has become one of the least important factors—only 23% of mobile consumers consider this benefit very important—so it is no longer an effective tool for mobile operators in luring or retaining subscribers. 360 View Update: Mobile Data Consumption and Preferencesnotes that roughly 9% of U.S. broadband households with mobile services are likely to switch providers in the next 12 months, with another 25% remaining undecided. Among mostly likely switchers, 74% consider good customer service as very important, 66% consider data rollover very important, and 65% consider free access to Wi-Fi hotspots very important.

“The migration away from a two-year contract has made service switching easier for consumers, and consequently mobile service providers are facing more pressure on churn,” Wang said.

Just last week, Verizon Wireless unveiled its new data plans with a feature that allows customers to rollover unused data, a course change for the company after insisting 18 months ago that it would not follow T-Mobile and AT&T’s similar practices. At the same time, T-Mobile has been touting the early success of its innovative customer rewards program and emphasizing its focus on customer appreciation via its “uncarrier” initiatives.

“We are going to see more creative ways from operators to persuade consumers to join or stay,” Wang said. “Churn management is becoming the next battleground for mobile operators to differentiate.”

This Parks Associates 360 View Update provides primary research and industry analysis for the mobile markets, including trends and insights into mobile voice and data services, smartphone and tablet adoption, and app usage.It also examines consumer activities on mobile phones and choices between Wi-Fi and cellular networks.

The research is available to purchase at www.ParksAssociates.com. To schedule an interview with an analyst or to request specific data, contact Holly Sprague at [email protected], 720.987.6614.

About Parks Associates: Parks Associates, a woman-founded and certified business, is an internationally recognized market research and consulting company specializing in emerging consumer technology products and services. Founded in 1986, Parks Associates provides business intelligence and research services through its proprietary methodologies developed over decades, including quarterly surveys of 10,000 internet households.

The company's expertise crosses many industries: home security and smart home, streaming video, broadband and pay-TV services, digital media and platforms, gaming, Wi-Fi and home networks, connected health, support, consumer electronics, home control systems, energy management, and tech solutions for the multi-dwelling (MDU), small-to-medium business (SMB), and commercial building markets.

Each year, Parks Associates brings thousands of leaders together for its webinars and annual events. The firm hosts the annual executive research and strategy conferences CONNECTIONS™, Connected Health Summit, Smart Energy Summit, Smart Spaces, and Future of Video. https://www.parksassociates.com
 

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