High turnover in emerging wireless markets

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TurnoverWhile we might be looking to emerging markets in China, India and Africa as the reason why so many people are packing mobiles these days, the market may not be as much of a wireless promised land as they had been made out to be. Strategy Analytics has reported today that the global subscriber churn rate has risen for the ninth quarter in a row to 2.5% in Q1 2007. North America and Europe are pretty stable on this front, but Reliance disconnected 6 million customers last quarter, and Malaysian carriers had to disconnect about 20% of their subscribers in an effort to register all accounts. The big reason for such drastic measures is the prepaid nature of mobile business in these markets.

David Kerr, Vice President, Global Wireless Practice, adds, “The increase in churn highlights the challenge of managing subscriber growth in many prepaid-centric emerging markets. In these markets, where new connections involve simply placing a new SIM card into one’s existing handset, competitive activity is having an increasingly detrimental impact on subscriber behavior and churn levels.”

As much as we might moan about being locked into plans for years on end, it certainly makes for a more stable industry.