Lower Churn: Sign Of Mature Market — Or Just Longer Contracts?
The info coming out of US mobile operators is that churn is down as customers are staying with their operator of choice for longer. The Dow Jones coverage of this news suggests the market is maturing and has reached a level of parity, such that people know that, basically, they’ll get about the same level of service from all operators. Of course, another, perhaps more reasonable explanation is simply that operators are doing everything possible to force people into longer and longer contracts. Rather than one year contracts that used to be common, now it seems like two year ones are standard — and the fee to break the contract keeps getting higher and higher. On top of that, for users who are about to reach the end of a contract, operators are offering cheap or free phones and other promotions — but only if they sign another long term contract.
