Price Drives Wireless Carrier Choice In Europe
For all the talk of increasing ARPUs by offering additional "premium" data services and convincing customers they're worth it, a new study in Europe says that the vast majority (85%) of customers choose their carrier based on price. This isn't really a surprise, of course. That doesn't mean there aren't ways to convince customers to cough up more - but it does involve some challenges. The base price does need to be low, but it is possible to charge for additional services. Where it gets tricky is that if a customer feels he is being nickeled and dimed, they get upset as well. This is what the landline carriers are discovering these days as they shift to a completely "flat-fee" offering, and discover that customers love it. What they've done, effectively, is changed the focus of the debate. Instead of competing on "price-per-call", they've made it so there is no price per call, and there's no worrying about additional charges. In the grand mental calculus, that seems less costly to a large segment of the population (while also providing more predictable revenues for the carrier). Update: Interesting complement to this story is a Business Week interview with Solomon Trujillo, CEO of Orange, complaining about how everyone is so focused on price, when he wants to focus on providing the customer more value.
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