According to market intelligence firm Parks Associates, mobile carriers are now adjusting the focus of their strategies to center around value-added and over-the-top OTT video services. That comes in response to the fact that churn rates are actually relatively low, with only 14-percent of mobile service subscribers choosing to switch providers when they make changes to their mobile service plan. Furthermore, only 39-percent of mobile subscribers have made any changes at all over the past 12 months and that number only decreases to include a third of all subscribers when taking 24 months into consideration. Unlimited plan offerings, the firm says, are no longer a viable way to attract customers. That all puts mobile providers under pressure to adjust strategies to draw in more customers.
Moreover, the highest net promoter scores (NPS) tend to go to prepaid services and services where the average revenue generated per user is low. Net promoter scores are a gauge of customer satisfaction and loyalty correlated to the revenue of a given company. Parks Associates suggests that could mean the more simplified billing for a service is, the more likely customers are to be happy with and not switch from their service. With regard to how that is affecting mobile carrier strategies, the firm points to AT&T’s move to exempt DirectTV – a service it owns – from mobile data caps. That allows consumers on its plans who don’t have unlimited mobile data to access the service’s videos without incurring overages or impacting the amount of data they have left to use at any given time. T-Mobile and Verizon are expected to take similar approaches when they launch their own OTT services later on in the year. Sprint, on the other hand, has included third-party OTT services with its own plans. The strategy is intended to give users more reason to switch or to stay despite the fact that, according to Parks Associates, postpaid mobile subscribers pay an average of more than $60 per month more than prepaid subscribers.
Meanwhile, whether or not the new strategies are ultimately successful appears to mostly come down to two separate factors. The first is whether or not any of the mainstream postpaid providers can shift churn upwards in its favor – effectively gaining customers while competing services lose them. Beyond that, it seems to hinge on whether or not those providers can have an impact on customer satisfaction that upsets the current trend in NPS rankings.
