Wireless & Mobile Landscape

U.S. Mobile Consumers and Churn: Who is churning and why?

Churn rates, which indicate the percentage of subscribers that end their service, are an important metric used to rate the performance of U.S. mobile operators and are regularly reported in mobile operators’ quarterly results. Because the overall number of mobile subscribers is no longer growing in the saturated U.S. mobile market, service providers must lure subscribers away from another provider if they want to grow their subscriber base, and when a subscriber moves from Operator A to Operator B, the churn rate of Operator A obviously suffers.

As churn rates are very important, many in the industry want to know why mobile subscribers churn. How do advertising and promotions, price, customer service, network quality, and other non-mobile services offered by a provider affect subscribers’ likelihood to stay with or leave their mobile service provider?

In addition to looking at the possible causes of churn, in this market study iGR also analyzes the churn rates for the major U.S. mobile operators, the current churning behaviors of U.S. mobile consumers, such as how long they have been with their current and previous providers, and U.S. consumers’ perceptions of the network quality, pricing and customer service of the major operators. The data in the study is based on a web-based survey of more than 1,000 U.S. mobile consumers that iGR fielded in March, 2017. When appropriate, the market study also compares results to those that iGR found in its November 2015 survey, which were published in a market study in the first quarter of 2016.


Key Questions Answered

  • What are the churn rates of the major U.S. mobile operators?
  • What percentage of U.S. mobile consumers have been with their current service provider for less than one year? More than one year? More than two years?
  • What percentage of U.S. mobile consumers have been with only one service provider?
  • How do advertising and promotions affect U.S. mobile consumers’ likelihood to switch providers?
  • How do bundled services, such as AT&T U-Verse and DirecTV, affect U.S. mobile consumers’ likelihood to switch providers?
  • How do U.S. mobile consumers perceive the network quality, pricing and customer service of the major U.S. mobile operators? How could this perception affect their likelihood to churn from their current provider?
  • Why did U.S. mobile consumers who switched operators in the last year do so?
  • Why do U.S. mobile consumers who have stayed with their operator for more than one year do so, and is there anything that might make them change in the future?

Who Should Read

  • Mobile network operators
  • Mobile service retailers and distributors
  • Financial and investment analysts.

Table of Contents

  • Abstract
  • Executive Summary
    • Churn Rates
    • Switchers’ Behavior
    • Stayers’ Behavior
    • Triggering Churn
  • Methodology
  • Mobile Operators and Churn
  • Mobile Consumers and their Providers
    • Current Mobile Provider
    • Current and Previous Mobile Providers
    • Always with the Same Mobile Provider
  • Drivers of Churn
    • Advertising and Promotions
      • Awareness of Promotions
      • Likelihood to Follow Up
      • Leverage to Get a Better Deal
      • Got a Better Deal
    • TV and Home Internet Services
      • Use AT&T Internet or TV but not AT&T Wireless
      • Use AT&T Internet or TV and AT&T Wireless
      • AT&T and DirecTV
  • Consumers’ Perceptions of Mobile Operators’ Services
    • Ranking of Network Quality
    • Ranking of Customer Service
    • Ranking of Pricing
  • Why Mobile Consumers Have Switched Operators
    • Previous Mobile Providers
    • Why They Switched
    • Do They Expect to Find a Better Deal?
  • Why Mobile Consumers Have Stayed with Operators
    • Reasons Subscribers Have Stayed
    • Stay Because of Good Network and Coverage
      • Compared to Perceived Ranking
      • Specific ‘Good Network and Coverage’ Reasons
    • Stay Because of Good Customer Service
      • Compared to Perceived Ranking
    • Reasons Subscribers Might Change in the Future
      • Number of Customer Service Issues Subscribers Will Tolerate
      • Tolerance for Network Quality Issues
      • Amount of Monthly Bill Decrease Needed
      • Amount of Monthly Rate Increase Needed
  • Consumer Demographics
    • Demographic Profile of U.S. Consumer Respondents
  • Definitions
    • General
    • Device Types
    • Services
    • Network Technology
  • About iGR
    • Disclaimer

List of Tables

  • Table 1: Postpaid Churn Rates for Q4 2016 (Sprint’s Q3 FY 2016)
  • Table 2: Postpaid Churn Rates for 2006 to 2016
  • Table 3: Amount of Time with Current Mobile Service Provider
  • Table 4: Current and Previous Mobile Service Providers
  • Table 5: Subscribers of Only One Provider
  • Table 6: Awareness of Advertising and Promotions
  • Table 7: Likelihood to Act on Advertising and Promotions
  • Table 8: Using Other Providers’ Promotions
  • Table 9: Success in Using Other Providers’ Promotions
  • Table 10: Use AT&T Internet or TV but not AT&T Wireless
  • Table 11: Use AT&T Internet or TV and AT&T Wireless
  • Table 12: Awareness of AT&T Acquisition of DirecTV
  • Table 13: Likelihood to Switch Due to AT&T Acquisition of DirecTV
  • Table 14: Likelihood to Stay with AT&T Wireless Due to AT&T Acquisition of DirecTV
  • Table 15: Ranking of Network Quality by Provider
  • Table 16: Ranking of Customer Service by Provider
  • Table 17: Ranking of Pricing by Provider
  • Table 18: Amount of Time with Previous Mobile Service Providers
  • Table 19: Reasons for Switching Mobile Service Providers
  • Table 20: Expectations for a Better Deal
  • Table 21: Reasons for Staying with Current Mobile Service Provider
  • Table 22: Reasons to Stay with Current Mobile Provider by Provider
  • Table 23: Subscribers Who Stay for Network and Rank Their Provider as Best
  • Table 24: Specific Important Aspects of a ‘Good Network’
  • Table 25: Subscribers Who Stay for Good Customer Service and Rank Their Provider as Best
  • Table 26: Reasons Subscribers Might Change Providers
  • Table 27: Number of Billing or Customer Service Issues Needed for Change
  • Table 28: Number of Network Quality Problems Needed for Change
  • Table 29: Amount of Monthly Bill Decrease Needed for Change
  • Table 30: Amount of Monthly Bill Increase Needed for Change
  • Table 31: Respondent Age
  • Table 32: Respondent Gender
  • Table 33: Respondent Ethnic Background
  • Table 34: Respondent Annual Household Income
  • Table 35: Respondent Level of Education
  • Table 36: Age of Children in Household
  • Table 37: Respondent Region
  • Table 38: Respondent Marital Status

List of Charts and Figures

  • Figure A: Postpaid Churn Rates for Q4 2016 (Sprint’s Q3 FY 2016)
  • Figure B: Postpaid Churn Rates for 2006 to 2016
  • Figure C: Amount of Time with Current Mobile Service Provider
  • Figure D: Less than One Year with Mobile Service Providers
  • Figure E: Reasons for Switching Mobile Service Providers
  • Figure F: Reasons for Staying with Current Mobile Service Provider
  • Figure G: Reasons Subscribers Might Change Providers
  • Figure 1: Postpaid Churn Rates for Q4 2016 (Sprint’s Q3 FY 2016)
  • Figure 2: Postpaid Churn Rates for 2006 to 2016
  • Figure 3: Amount of Time with Current Mobile Service Provider
  • Figure 4: Current and Previous Mobile Service Providers
  • Figure 5: Subscribers of Only One Provider
  • Figure 6: Awareness of Advertising and Promotions
  • Figure 7: Likelihood to Act on Advertising and Promotions
  • Figure 8: Using Other Providers’ Promotions
  • Figure 9: Success in Using Other Providers’ Promotions
  • Figure 10: Use AT&T Internet or TV but not AT&T Wireless
  • Figure 11: Use AT&T Internet or TV and AT&T Wireless
  • Figure 12: Awareness of AT&T Acquisition of DirecTV
  • Figure 13: Likelihood to Switch Due to AT&T Acquisition of DirecTV
  • Figure 14: Likelihood to Stay with AT&T Wireless Due to AT&T Acquisition of DirecTV
  • Figure 15: Weighted Ranking of Network Quality by Provider
  • Figure 16: Weighted Ranking of Customer Service by Provider
  • Figure 17: Weighted Ranking of Pricing by Provider
  • Figure 18: Switchers’ Amount of Time with Previous Mobile Service Providers
  • Figure 19: Less than One Year with Mobile Service Providers
  • Figure 20: Reasons for Switching Mobile Service Providers
  • Figure 21: Expectations for a Better Deal
  • Figure 22: Reasons for Staying with Current Mobile Service Provider
  • Figure 23: Reasons to Stay with Current Mobile Provider by Provider
  • Figure 24: Subscribers Who Stay for Network and Rank Their Provider as Best
  • Figure 25: Specific Important Aspects of a ‘Good Network’
  • Figure 26: Subscribers Who Stay for Good Customer Service and Rank Their Provider as Best
  • Figure 27: Reasons Subscribers Might Change Providers
  • Figure 28: Number of Billing or Customer Service Issues Needed for Change
  • Figure 29: Number of Network Quality Problems Needed for Change
  • Figure 30: Amount of Monthly Bill Decrease Needed for Change
  • Figure 31: Amount of Monthly Bill Increase Needed for Change
  • Figure 32: Respondent Age
  • Figure 33: Respondent Gender
  • Figure 34: Respondent Ethnic Background
  • Figure 35: Respondent Annual Household Income
  • Figure 36: Respondent Level of Education
  • Figure 37: Age of Children in Household
  • Figure 38: Respondent Region
  • Figure 39: Respondent Marital Status

For additional information on the U.S. Mobile Consumers and Churn: Who is churning and why? market study, please contact Iain Gillott, at (512) 263-5682 or by email.