Local Number Stability

Carl Weinschenk

Carl Weinschenk spoke with Glen LeBlanc, research director for mobile services, The NPD Group. NPD regularly tracks mobile usage patterns. The most recent report is based on February statistics.

 

Weinschenk: What did the study look at?
LeBlanc: It's a consumer survey. We asked them how many phones they use. The interesting statistic is that almost 90 percent of the population only has one phone. That leaves just over 10 percent with multiple accounts, which we would take to be business phones. What we were looking at is the usage of devices, what kind of contract they are on, how long is left on the contract, whether they are satisfied with their carrier, whether they are likely to switch in the next three months and what kind of services they use.
[We also asked] of those services you use, how often do you use them and how much do you pay for them? The reality is you can actually look at the deconstruction of the average revenue per user. Right now a carrier will say [for instance] that we have average revenue per user of $60 per month. Five dollars of that is for data. From a carrier perspective when reporting their financials, text is data-and so what Verizon is getting for Vcast is lumped in with general data. [The study] looks to break that down for consumer spending for each of the services.


Sixty-seven percent said that they are completely satisfied or very satisfied with their carrier. That's amazing. When you look at who is not happy, not very satisfied or not at all satisfied, that's a very low percentage, in the single digits. They are doing something right. A quarter of the people are saying they are neutral. So, okay, maybe the carriers have some work to do. When two out of three people are very or completely satisfied you are doing a very good job. When you look at churn numbers [and ask] people if they are probably or definitely going to switch in three months - that is the danger zone - it is just over seven percent. That's a good number for them.

 

Weinschenk: Local number portability - the right to take a number from carrier to carrier - was thought to be a big problem for carriers. How has it worked out?
LeBlanc: When you talk to the average person on the street and ask them if they kept their number when they moved, they say, "Yes, I kept my number." But the question or big fear for the carriers was that was what tied consumers to them - that changing [numbers] was [too] painful. What turned out to be true was that yes, it was painful [to switch numbers] but that was not keeping them with their carrier. Of the people who switched, roughly 25 percent said they kept their number. The rest did not for one reason or another.

 

Weinschenk: Are the data services acting as glue, helping to cut the number of people who take advantage of LNP to switch carriers?
LeBlanc: I think the carriers are hoping that the data services will help drive customer retention. I personally do not feel the data services are differentiated enough at this point in time. If I'm interested in music downloads I can do that with Verizon, Sprint or Cingular. I can text with any carrier. The differentiated services are only now starting.



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