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.
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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