[3GScottishUser]

From Mobile Today (29/04/2005):

Dealers are predicting a significant rise in 3’s customer churn as the first customers gained in 2004’s massive growth spurt reach the end of their contracts.

Mobile surveyed independent dealers across the country and found that 16 out of 20 said a significant number of 3 customers were reluctant to stay on the network when offered a 3 upgrade.
While the majority of 3 customers are not yet eligible for upgrades – its customer base in March 2004 was just 361,000 – dealers say the situation is likely to deteriorate as those 3 customers who have experienced problems with their LG handsets come to the end of their contracts.

According to the survey, dealers are finding it difficult to sell upgrades to existing 3 customers. Some dealers Mobile spoke to estimated that their 3 upgrade sales were less than 1% of new contracts sold. Others claimed more than ten times as many customers came in-store to switch to another network, rather than seek an upgrade.

One London dealer said: ‘3 is great at putting new customers onto contracts but can’t keep them. It’s like a marriage, and 3 has the highest divorce rate in the industry.’

With 3’s current customer acquisition running ahead of that 12 months ago, new business will inevitably be greater than upgrades. However, dealers told Mobile that they were seeing more customers than average looking to move to another network rather than seek an upgrade.

‘Nobody can match the 3 tariffs, but they are not keeping their customers happy,’ one dealer Mobile surveyed said.
A 3 spokesman denied that the operator was on the brink of seeing its churn rate accelerate: ‘We’re confident that 3 has the best range of 3G handsets and we continue to set the benchmark for value. We still have the best deals in the UK.’

He added that churn was below the industry average: ‘As you would expect from a service company, we have retention strategies in place for our customers and we’re not seeing unusual activity on disconnection in the base.’

However, it is not simply customer dissatisfaction that is fuelling churn. 3’s rivals have sharpened their offers in a bid to both retain and attract new business.

Another dealer we surveyed said: ‘Now that we can show comparable handsets and tariffs on other networks and get better commission from them, there is a clear risk of people moving away from 3.’

http://www.mobiletoday.co.uk/artman-test/publish/article_333.shtml

[3GScottishUser]

Does the above come as any surprise to anyone?

At last the trade press are latching onto a trend that we enthusiasts have been aware of for some time.

Looks like 3 are having to run to stand still just now. They'll have a really hard job trying to convince customers with LG U8100/8120 to take an almost identical handset (U8130/8138) and stay for a further 12 months.

Aw well..... one reaps what one sows - so they say!

[Ben]

lmaoo, you've got a thing about typos in post subjects! ;)

I think Three should, and might, pull out all the stops in the retention department if they want their acquisition drive last year to have any lasting effects whatsoever. However, the 6630 via CPW might again be a Nokia lifeline to the network.

The biggest losses will be customers on 12-month half price cashback deals. They're not going to suddenly start paying double. Infact, in some cases I do believe, some customers were paying about £50 for a whole year. They'll churn, but I'd imagine they'll stick with Three - just on a new contract.

A lot of A and E1000's might get shifted too as previous 'newcomers' to 3G look for more advanced handsets. The range is poor, though.

[Hands0n]

The attrition that H3 is experiencing (despite their official and entirely predictable response) has been predicted by 3G enthusiasts such as ourselves who have sampled the entire package (network, content, quality and service). Many early adopters, who are experienced in the practise, stood by and watched, and waited, and watched and waited. But the anticipated improvements were agonisingly slow to come along and disaffection set in. But that is just us! Some of whom are still on contracts - but will we stay the course after time out?

The other users who came along on the offer of cheap tariffs, even cheaper handsets that could do all except make the tea were to face an even bigger disappointment. These were not experienced in dealing with a virgin network op. The various forms and boards still ring out to their shrill cries of anguish and grief at the mobile op who sold them a dud and then would do nothing to put things right, or simply could not! No need to repeat any of that here - we all know the stories by heart these days.

So how is anyone at H3 reasonably going to predict that a strong churn will not occur? That is the stuff of the legendary Osterich. Then the question has to be, what exactly is H3's strategy to deal with this? Early 1Q/2005 reports are not encouraging - being offered inferior upgrade packages to new comers? That will do little to nothing to encourage customers to stay. Buy the customers back? Can they afford to?

There are a number of issues for H3 to solve - a lot of these are in the Service and Support area. Imagine having a mobile phone that you cannot take abroad with you with any degree of comfort that it will work there? Do you even consider the notion of your 2g/2.5g handset not working abroad? When, for instance, were you last asked for a £250 up-front fee for enabling International Roaming (such as it is with H3)? In an age when almost everyone at one time or another flies abroad this is an absurdity worthy of Monty Python. There's more of course ...............

The Chinese proverb goes "May you live in interesting times" ..... I think that H3 are certainly operating in these. I wish them well, truly, but don't hold out a huge bundle of hope that they'll be anything more than the Liberal Democrats of the mobile networks. Always there, but never amounting to very much.

NB: No offence intended to those of you who are LDs - I could have said "Greens" but it wouldn't have had the same ring :)