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Emerging Market Mobile Subscriber Churn

Mobile operators will experience increasing struggles trying to hold onto their customers, according to a new global market study by Strategy Analytics.

On a global basis, the rate of subscriber churn posted its ninth consecutive quarter of annual growth, reaching 2.5 percent per month in Q1 2007. The main culprit for this increase is mobile service provider subscriber volatility in emerging markets.

This quarterly report provides a health check for the wireless operator community, tracking the operational and financial performance of 125 individual operators, accounting for 75 percent of the world's cellular users.

The report found that churn was relatively stable in Europe and North America, but continued to increase in Asia-Pacific, Central and Latin America, the Middle East and Africa.

"Subscriber registration and re-verification procedures have highlighted the challenge of real subscriber growth in a number of emerging markets over the last few quarters," comments Phil Kendall, Director, Global Wireless Practice and author of the report.

"Operators in Malaysia were forced to disconnect nearly 20 percent of their prepaid subscribers at the end of 2006 as part of their drive to register all mobile phone accounts. Additionally, India's Reliance Infocomm disconnected nearly 6 million of its 30 million customers in Q1."

David Kerr, Vice President, Global Wireless Practice, adds, "The increase in churn highlights the challenge of managing subscriber growth in many prepaid-centric emerging markets. In these markets, where new connections involve simply placing a new SIM card into one's existing handset, competitive activity is having an increasingly detrimental impact on subscriber behavior and churn levels."

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