Has Cell Service Improved, Or Have Customers Been Beaten Into Submission?

from the we-heart-customers dept

Tue, May 23rd 2006 12:17pm — Carlo Longino

A new report shows that US mobile operators' churn (the measurement of how many subscribers leave each month) is somewhere around 1.8%, following a steady decline from about 2.8% five years ago. This is despite the popularity of number portability, which removed a major barrier to customers switching carriers, though the increasing lengths of contracts they foist on consumers erects one in its place. So why is churn so low, and why does it continue to drop? Carriers would point to statistics showing a decreasing number of consumer complaints, and say they're doing a better job of taking care of their customers. But these stats are hardly conclusive, and anecdotal evidence would say that while prices have dropped and networks have improved over the last several years, customer service hasn't kept pace. What seems more possible, if not more likely, is that consumers have danced around between different carriers, and while they don't have a lot of intrinsic loyalty, their experience tells them that the grass isn't necessarily greener on the other side when it comes to customer service.

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19 Comments

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John, 23 May 2006 @ 12:14pm

Churn
Actually churn is a percentage. It's the number of subscribers deactivating in a given month divided by the average subscriber base for the same month. Here's the formula: churn % = (# Deactivating Subscribers / (Beginning of Month Subscriber Base + End of Month Subscriber Base)/2) The other factor impacting churn is the improved involuntary churn rate, or deactivations based on non-payment, that has occurred in the last few years. Part of the reason for this can be attributed to Family plans offering Sub Prime credit class consumers to exist under Prime credit class subscribers. The flip side to this is lower ARpU.
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Matthew, 23 May 2006 @ 12:14pm

Churn
Unfortunately, churn tells you nothing about the number of customers leaving a network; neither does it tell you the percentage. What it is tells you is the proportion of customers as a percentage of the 'average' customer base. During rapid growth, the average number of customers is significantly lower than the year end figure; during market maturity these figures start to converge. Thus, the denominator in the churn calculation is lower during rapid growth, hence a higher churn figure.
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TriZz, 23 May 2006 @ 12:30pm

Cell phone providers
I've used them all (excluding Sprint). I'm stuck at Verizon. I love it.

I used to provider hop based on who had the coolest phones but now, it's about the network.

Of course, other readers will disagree - and that's OK. Different areas have better service with certain providers...but I think price vs. service (in my area) Verizon has it beat. I love the Nextel PTT feature, but there service wasn't enough to keep me.

$.02
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Anonymous Hero, 23 May 2006 @ 12:45pm

"Uncle"
We're just 'Beat'...

LOL
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drkkgt, 23 May 2006 @ 1:02pm

I have Verizon as well and enjoy the service but I hate having to call for any type of help. For example, my phone broke a while ago and I have the insurance. Call up the support number, oh you need to take it to the store. Go to the store and the lady says we don't have that phone. Okay, but I still paid fo rinsurance and repair so what do we do? Her reply was, "we don't have that phone." It was like some freakin automaton. Scary. I don't think she even blinked. Anyway, called support again and told them the story and they told me to go back to the store. Finally got support from the supervisor and got it fixed.
Same kind of thing when I went to get a new phone from a different store. Automatons, no actual thinking involved. Then again, that may just be the state of retail not so much Verizon.
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Anonymous Coward, 23 May 2006 @ 1:17pm

It's more that there is no where to go.
I had sprint, switched to due to better pricing and rollover Cingular but then they screwed us on the price so now we're looking to switch again and it'll probably be back to sprint once again.
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anonymous coward, 23 May 2006 @ 1:31pm

there is very little differentiation in the product and airtime has been commoditized. duh.
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freakengine, 23 May 2006 @ 1:41pm

Cell service as a whole is pretty terrible. I'm always having difficulty with the "lag" between when I talk and the other party hears it. If land lines were ever this bad, it must've been before my time. I suppose most consumers have simply accepted this substandard performance, but it can drive you crazy if you're sensitive to it. Unfortunately, if no one complains, nothing will ever be done to make the performace better.
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JerseyRich, 23 May 2006 @ 1:55pm

Nextel Corporate....
I help manage a fleet of about 500 Nextel units. Since our bill is $16K a month, we get served by "Corporate Accounts" department.

I have to say that I am never, ever put on hold (once I go through the prompts) and the service is very good.

Too bad it costs sixteen-thousand dollars a month (spelled out for effect) to get this service :)
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Rick, 23 May 2006 @ 2:16pm

2 year contracts! UGH!
Yea, I submitted and signed a 2 year agreement with Sprint about 6 months ago - got a free phone for it, so it seemed ok. I snagged the Fair and Flexible plan with 400 minutes for $34.99 a month. I was happy.

Recently, they started advertising free minutes after 7pm on ANY Fair and Flexible plan. Cool, I was even happier. Then I got my bill...

I was using my 'free' 7-9pm Fair and Flexible minutes - and I was charged for every one of them!

I called called Sprint, sat on hold for over 90 minutes after taking 10 minutes to navigate the voice prompt system just trying to SPEAK to someone. The someone I got was in India I think, their english was TERRIBLE, and they could barely understand me, let alone me figure out what they were saying - I have no accent at all! I hung up.

I emailed them and was told my plan does not include 7pm minutes, I would need to sign up for the $39.99 plan to get the free 7pm minutes. I would also ned to sign another 2 year agreement.

I balked, disputed every solution they offered - another NEW 2 year agreement?! I have to sign a contract in order to get something they say is free with my plan and I have to pay them an extra $5 a month for these FREE minutes? Didn't seem free to me. :(

After about 6 emails they offered me a 1 year term. a few emails later they removed the contract term requirement from their 'solution' Yet they refused to admit the free minutes were not free and they refused to give my Free and Flexible plan the free minutes, even though they advertise ANY Fair and Flexible plan now has free calls after 7pm.

I'm still furious, it's false advertising and seems predatory to enslave me to their service in 2 year chunks.

I hate the way companies get away with this, just because they all do it. I hate the fact I can't use the internet the way I want - I have to use THEIR internet and services. I hate the fact I cannnot download anything to my phoen without paying 2cents a KB - a typical website can cost you $1, $5 or more to just look at a page! Screw video.

I can't wait for voip and wifi to work their issues out, especially with the latency and availability. I know the telcos and now the cablecos will fight it tooth and nail.

Their only interest is in themselves and paying for the 20-50 year old POTS and cable lines again, the ones we've paid them for 20 or 30 times now.

Capitalism has it's downfalls, this is one of them. I'm thinking it's time to begin endorsing nationalizing things like the wired networks, oil industry and whatnot - the current system is broken and getting worse. It used to be about and FOR us - now it's all about THEM.
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- Anonymous Coward, 24 May 2006 @ 8:50pm
  
  Re: 2 year contracts! UGH!
  Capitalism has it's downfalls, this is one of them.
  Actually, true capitalism requires a free market with open competition. Something that doesn't exist in this industry. No, the real problem here is that of big business being protected by corrupt big government. And the public going along with it.
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Anonymous Coward, 23 May 2006 @ 2:21pm

The simple truth, sad or otherwise, is that if you are in the Verizon service area it's tough to justify anything but Verizon. The free IN network calls really cut the costs if your most frequent calls are to other Verizon customers.

Also seems to get people to lean on their friends and family to switch "because then we won't have to pay to talk to each other." Smart move by Verizon and too little too late by the rest.

In any case, both the network and phones are a lot better than they were in the past.

I've also noticed that people complaining about their bills inevitably use a lot of enhanced services that cost extra. If you download videos, news clips, MP3's, ringtones and the rest of that crap, put a lid on your complaining - it's your own damn fault. It's a phone fer cryin out loud, not a home entertainment center. Just because they sell doesn't mean you have to buy.
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codingace, 23 May 2006 @ 2:31pm

Wireless Carriers
Cell service has NOT gotten better. The Cingular/AT&T merger was one of the biggest wireless fiascos of all time for their customers. Verizons service is better, but not by much. Nextel is the only carrier I deal with that seems to be able to help the customer in a timely fashion. Except for Nextel, I feel I have been beaten into submission
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Jeremey Barrett, 23 May 2006 @ 3:36pm

Service not improving
I would definitely say that voice quality and call service has not improved. Some things are improving, but they happen to be the ones that will get the carriers more subscribers (e.g. coverage areas).

I would agree that the Cingular/AT&T merger was and still is being handled poorly on the technical side of things.

Having said all of that, I'm pretty familiar with how cellular calls actually work and it's really pretty miraculous that any calls go through at all. :)
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fuzzmanmatt, 23 May 2006 @ 8:40pm

I'm 21, I got my first phone six years ago, and in that time, I've broken many phones, changed many carriers, changed locations many times, and I still believe that my best service was back six years ago. The phone still works, gets coverage nearly everywhere I am now, and the service price back then was amazing. Since then, everything has either gotten worse or stayed the same. It kinda sucks, but it's all based on the phone right now, the networks are the same (two carriers own the networks around me, Tmobile and Dobson, just rent airtime to other carriers), and the service is all outsourced to somebody who doesn't speak my language.
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Anonymous Coward, 24 May 2006 @ 8:56am

My wife activated a Sprint phone a few months back that she got from her mom. I'm not sure how long her mom had had it, but I'm guessing at least a year before she gave it to my wife. The screen quit working on the phone and my Sprint phone was pretty old so we went shopping for phones. Neither of us were under a contract from Sprint so we could pretty much go with any carrier.

We checked Verizon and found some pretty good deals, and our friends told us the network was good. We went to the Sprint store to see what they could do and see if they would try and keep our business. They told us because the phone had not been activated for very long (not sure what the minimum was) that they could not offer a new free or discounted phone and contract. My wife and I had been Sprint customers for over 2 years, but because this particular phone hadn't been activated long enough they wouldn't give us any kind of deal. What a crock. We told them we were going to go somewhere else and they weren't very concerned. They told us we could call the Customer Retention department, but that they probably wouldn't be able to do much either.

So we went with Verizon, my wife got a Razor and I got an LG. We've been pretty happy so far, and the network is a lot better. And I didn't have to sit on the stupid phone for an hour trying to activate the stupid thing. It was activated at the store in about 5 minutes, much simpler than with Sprint.
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Julie, 24 May 2006 @ 10:12pm

Stuck with Sprint (like it or not)
I'm with Sprint and besides the two year contract I have, I'm also stuck with them since they were the only ones kind enough LOL to give me service without a deposit. In fact, I am approved to have three phones with them although I only have two. However, I do have a spending limit which I do appreciate since I can't really see much benefit in my brother and I have a combined cell phone bill over 250 dollars a month. For the most part Sprint has been great. In fact, I think in the two and a half months I have had service with them they have credited my account over 200 dollars for various issues I have had, including my sister-in-law trying to sign up for websites that text message ring tones to a phone that does not even have the capability for downloading said ring tones. Sprint did not have to credit us for this issue since it was my sister-in-law's fault but they have tended to go out of their way to accomodate us.
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Kary, 5 Dec 2006 @ 8:54pm

Verizon yo!!! it's the shit!
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Anonymous Coward, 13 Jul 2007 @ 10:00am

Sprint sucks! DONT GO WITH SPRINT!
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