Customer churn in the India mobile market shows why Jio--the market share leader--also considers new spectrum assets important. Since August 2020, Jio’s churn rate has increased, while competitor Airtel gained all of 2020. Vodafone Idea, which had been bleeding customers most of 2020, reversed trend in November 2020 and saw improved customer churn.
Opensignal suggests user experience issues--not price--explain the trend.
Customers who switched mobile providers across the Airtel, Jio and Vodafone networks “on average spent between 74 percent and 155 percent more time without a mobile signal compared to the average scores on their networks,” Opensignal says. “They also spent less time connected to either a 3G or 4G mobile connection” and also experienced lower availability of the 4G network.
That likely explains why Reliance Jio boosted its spectrum 55 percent in the recent 4G spectrum auction. The challenge of having the largest mobile market share is that this also tends to imply a need for greater amounts of network capacity. Though reducing the size of cell serving areas helps, additional spectrum has been a traditional way of boosting capacity.
High prices and inadequate coverage are traditional reasons for mobile customer churn. But signal availability, low mobile data speeds or high latency performance--which might all be reasons for user experience issues--also drive customers to seek new providers.
That seemed to be the case for Reliance Jio for the back half of 2020.
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