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Smartphone users at the highest risk for churn

by david.nunes

Espoo, Finland – September 14, 2010

Smartphone users demand best voice and data quality – and are at the highest risk for churn

Global customer Acquisition and Retention Study reveals one out of three users ready to swap operators

· Customer loyalty to operators is lowest in mature markets with high smartphone penetration

· Close to 40% of smartphone and data card users likely to churn within a year

· 20,000 subscribers in 17 countries interviewed for global study

Nokia Siemens Networks has identified that customer intent to churn in the UK, Germany and the US due to dissatisfaction with network quality has grown significantly over 2008 levels. This is just one of the findings of a global Acquisition and Retention Study that highlights key drivers for customer satisfaction for fixed
and mobile telecoms services.

“In mature markets, where mobile broadband and smartphones have recently taken off, customer loyalty is lowest,” said Michael Matthews, head of strategy and business development at Nokia Siemens Networks. “The silver lining in our findings, however, is that price is becoming less critical as a churn trigger. Without a doubt, access to mobile broadband has changed people’s priorities and the expectations they have of their service providers.”

“Now it’s the experience people have – how happy they are with the service they’re getting – that’s key to attracting and retaining subscribers. People are asking: How good’s the coverage? How clear are my voice calls? Do I get a connection when I want one? Are my messaging services simple and flexible? And, increasingly, how accessible and fast is my Internet connection?”, added Matthews.

The study reveals that in the UK, 45% of the negative experiences people have with their mobile can be explained by network quality falling below expectation. This may be attributable to the recent steep increase of smartphones in the network, which can cause a rapid increase in signaling traffic that has the potential to cause network congestion for all subscribers. The study results were similar in the US and Germany, and, unless the issue is proactively addressed, it’s only a matter of time before emerging markets around the world have same issues. Already, the global impact of network quality on subscriber retention stands at 34%, far higher than in previous years.

Many operators around the world are already taking action to improve the quality of experience for their subscribers. Nokia Siemens Networks recently completed the London Experience Project with Telefónica O2, in which the company optimized the network for smartphones by minimizing the signaling load. The O2 network has now been verified by the British Approvals Board for Telecommunications as the “fastest mobile broadband” network in London.

Nokia Siemens Networks conducts its Acquisition and Retention Study to provide the world’s leading operators with vital information on consumer behavior across mobile and fixed networks. More than 20,000 consumers are interviewed for the study across 17 countries covering mature markets and highly competitive emerging markets.

About Nokia Siemens Networks

Nokia Siemens Networks is a leading global enabler of telecommunications services. With its focus on innovation and sustainability, the company provides a complete portfolio of mobile, fixed and converged network technology, as well as professional services including consultancy and systems integration, deployment, maintenance and managed services. It is one of the largest telecommunications hardware, software and professional services companies in the world. Operating in 150 countries, its headquarters are in Espoo, Finland. www.nokiasiemensnetworks.com

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