Wireless Carriers Need to Find Ways to Keep Customers to Stay Profitable
There are already so many wireless users in North America that carriers need to think of ways to reap additional profits from their existing customers, rather than finding new ones, according to PricewaterhouseCoopers.
Thu, February 25, 2010
Computerworld — There are already so many wireless users in North America that carriers need to think of ways to reap additional profits from their existing customers, rather than finding new ones, according to PricewaterhouseCoopers.
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Two new reports from the analyst firm note that carriers already recognize the need to retain customers and are investing heavily in networks, with a 30% leap in spending on network improvements in 2009 over 2008, or about $160 per subscriber last year. Retaining wireless customers also has increased customer service costs, which jumped 50% from 2007 to 2008, PWC said. The analyst firm relies on surveys of carriers for its data.
Alain Sur, a PWC analyst, said that carriers will need to refine their techniques for gaining added profits from an existing customer base in the coming years. He suggested that carriers "go the extra mile" for the customers that spend more and find ways to reduce the costs of unprofitable customers. Tiered pricing options for different types of users, ranging from smartphone users to less data-intensive users, are also needed, although the major carriers already offer a wide range of pricing plans.
PWC's data confirms what various carriers have reported independently -- that smartphone users provide higher average revenue per user (ARPU) than other customers. PWC said that about 21% of all mobile devices sold as of June 2009 were smartphones, and about 12% of all subscribers used smartphones.
The monthly ARPU for a smartphone customer was $74, compared with $54 for all wireless subscribers using postpaid plans where they have established contracts.
Matt Hamblen covers mobile and wireless, smartphones and other handhelds, and wireless networking for Computerworld . Follow Matt on Twitter at @matthamblen or subscribe to Matt's RSS feed@matthamblen or subscribe to . His e-mail address is mhamblen@computerworld.com .
Read more about mobile and wireless in Computerworld's Mobile and Wireless Knowledge Center.
© 2010 Computerworld Inc.
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