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Why Business Mobile Service Users Churn

Wireless network operators are failing to make their high 'average revenue per user' (ARPU) subscribers in North America feel special, according to a new market study by In-Stat.

More than 60 percent of these mobile phone service users do not believe that their wireless operator appreciates their business, and 80 percent believe that operators should do more, the high-tech market research firm says.

"The kind of appreciation these users would like to see include loyalty programs where subscribers earn points for awards, free or low-cost directory assistance, and free batteries and travel chargers," says Bill Hughes, In-Stat analyst.

"The good news for operators is that these three awards could be turned into even more revenue. For example, directory assistance directly encourages more calling, and offering more batteries and charging options ensures that heavy users can always make a call."

To date, the U.S. mobile service provider 'customer retention strategy' can be summed up simply -- get them to sign yet another 2-year contract, period. End of contract promotions rarely include any substantive value-added offers, beyond the typical teaser of a replacement 'locked' mobile phone.

This scenario naturally creates a low threshold for differentiation via customer care oriented value propositions. When subscribers are only contacted once every two years by their service provider, there is no meaningful incentive for customer loyalty -- beyond avoiding the inconvenience of switching providers.

Failure to address this market has the potential to leave wireless operators vulnerable to the coming wave of new mobile data service operators -- that will gladly serve the rapidly growing mobile needs of these high-value customers, if given the chance.

The In-Stat research -- appropriately entitled "Road Warriors 2007: Love Them or Lose Them" -- covers the results of an survey of wireless users, primarily in North America. It provides analysis of survey findings, including characteristics of high ARPU wireless users.

In-Stat's market study found the following:

- Compared to all business users, road warriors are three times more likely to have an ARPU over $150, own a smartphone, and use several mobile data services.

- The ARPU for road warriors who are also smartphone users is over $200. This is more than four times the monthly revenue for U.S. mobile phone users.

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