Operators starting to win battle against churn in Western Europe - Customer loyalty linked to stabilisation in pricing, innovative tariffs and smartphone popularity

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The long-running trend of increasing subscriber churn rates for mobile operators in Western Europe appears to be coming to an end. Overall churn for the region fell by more than 5% in 2010 having reached an all-time high in 2009, marking a small but significant shift in subscriber behaviour.

This stabilisation in operators’ churn rates is the result of a slowdown in the general trend of declining ARPUs in the region, as well as the increasing tendency for prepaid users to migrate to contract services. The latter trend is due in part to the popularity of smartphones, which has given operators the opportunity to lock-in customers to longer contracts on the back of large handset subsidies, but also due to operators actively addressing churn through the development of new tariffs that have made contract services more attractive to prepaid users. As average contract lengths increase in the region, operators are also concentrating their efforts on retaining customers when those contracts expire, through the introduction of loyalty programmes and other innovative strategies.