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Wireless Carriers and Churn

June 16, 2007 in Wireless Industry News

The Motley Fool came up with a rather informative short piece about the past and present “churn” rates for the four biggest wireless players in the USA: Verizon Wireless, AT&T, Sprint Nextel, and T-mobile (Deutsche Telekom).

What’s a churn rate? It’s the percentage of customers that pack up and leave a wireless carrier, based on the total amount of subscribers.

Since each company calculates churn rates differently, it’s tough to compare rates across the board. But comparing a carrier’s churn rate over time tells you a lot about the company:

(listed quarterly starting from 3/06 and going until 3/07)

AT&T: 1.9%, 1.7%, 1.8%, 1.8%, 1.7%
Verizon: 1.2%, 1.1%, 1.2%, 1.1%, 1.1%
Sprint Nextel: 2.3%, 2.4%, 2.8%, 2.7%, 2.7%
T-Mobile: 2.7%, 2.9%, 3%, 2.9%, 2.6%

So what this basically tells us is that AT&T and Verizon have done a great job in keeping their customers happy, while the two smaller wireless carriers haven’t been doing so hot. Looks like Sprint is the worst at keeping churn under control – at least T-Mobile posted a nice decline in its churn rate in the most recent quarter.

The results aren’t exactly surprising. AT&T and Verizon have the two largest networks in the USA, and are arguably the two most reliable carriers. They also have the most customers – combine that with “in-network” calling/m2m minutes and it’s not that hard to see why customers would hesitate to leave the Big Two.

Source: “Wireless Smackdown: Comparing Carrier Churn” – The Motley Fool

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