Tuesday, November 7, 2017

U.S. Mobile Churn is Low and Dropping, Net Adds from IoT

Low U.S mobile service provider churn rates illustrate the extreme difficulty of taking an account away from a competitor. And though the larger customer bases owned by Verizon and AT&T mean that the actual number of customers “churning” every quarter still is a sizable number, desertion rates are historically low.

In past decades, consumer service churn rates have been as high as three percent a month. In recent years,  Verizon and AT&T experience just about 1.25 percent churn over a three-month period.

In its latest quarter report, AT&T reported just 0.84 percent churn, while adding a net 327,000 accounts. Verizon added about 115,000 net accounts. A growing percentage of those gains are non-phone adds (connected cars, sensors).

T-Mobile US, on the other hand, had both higher churn rates and much-higher net additions. Churn rates also dropped to about 1.25 percent.  

Sprint added some 370,000 net new accounts.

But none of that moves the needle too much in a market with 400 million total accounts.

Some might find odd the notion that net new accounts are being added at a time when churn is low and markets are saturated. The answer is that incremental growth already is coming from internet of things or machine-to-machine accounts. IoT and cars accounted for 62 percent of the net-adds for the quarter, according to Chetan Sharma.



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