Nearly 20% of U.S. Subscribers Consider Switching to Different Carrier

by | Jul 29, 2017 | Blog, News/Trends | 0 comments

One certainty in the carrier business is that there is always turn-over of the subscriber base. According to a new report from Jeffries Equity Research Americas, nearly one-fifth of U.S. postpaid subscribers are currently considering a change to a new carrier.

Of the 1,000 polled subscribers, 78% aren’t considering a change and have, in fact, been with their service provider for more than three years. Turns out that 75% haven’t switched carriers in five years.

So, is there a carrier, or carriers, that is being impacted more than the others? And what is driving the move?

According to Mike McCormack and other Jefferies analysts “Of the most loyal demographic (consumers who have not switched carriers in the last five years), propensity to churn in the next 12 months appears lowest for AT&T, followed by Verizon, T-Mobile and then Sprint.” They added that “The results indicate future levels of disconnects at Sprint are likely to continue to outpace competition—24.7% of this group indicated they were likely to switch carriers, materially higher than peers.”

Network coverage is arguably one of the top priorities for customers and continues to be a challenge for the nation’s two smaller Tier 1 carriers.

“While some might argue that network quality is converging, the survey suggests a gap remains in carrier coverage,” the analysts wrote. “T-Mobile has made great strides in network improvement in recent years (i.e., 700 MHz build), yet based on our survey, coverage remains the largest pain point for the Uncarrier, while Verizon and AT&T still lead from a network perspective.”

The other customer priority is pricing. Users clearly value the unlimited data plan—more than 86% of respondents indicated they would consider unlimited plans at another operator. The ever-increasing demand for streaming is putting pressure on the carriers and they will have to adjust their pricing strategies with consumers that are getting used to the current unlimited plans.

“Despite the unsustainability of unlimited in its current form,” the analysts wrote, “the survey suggests consumers are highly price sensitive and would not welcome price increases; 75.4% of survey respondents indicated they would switch carriers or lower data tiers in lieu of a price increase.”

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