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Most mobile markets have shifted to being “churners” markets

The past decade has witnessed a global surge in the level of worldwide mobile penetration, which is measured as the number of SIMs over population.

The International Telecommunication Union (ITU) estimates that the global mobile voice penetration has passed the landmark of 100% penetration around 2015.

  • Mobile voice penetration now exceeds 120% in Developed countries (i.e. well over than 1 SIM per person in average),

  • Developing countries have recorded an increase in mobile penetration over the last decade from <80% to close to 100%,

  • Even in the so called “Least developed countries,” mobile voice penetration has doubled from 40% in 2011 to ~80% by 2019.

Mobile voice subscriptions per 100 inhabitants, 2008-2019

Source: ITU

Mobile voice subscriptions per 100 inhabitants, 2008-2019

As acknowledged by the GSMA (the mobile industry’s global trade association), the days of strong mobile penetration growth are now behind us, with most market poised for only a modest growth in the foreseeable future.

Global growth of mobile connections (excluding IoT)

Source: GSMA

Global growth of mobile connections (excluding IoT)

The massive mobile penetration growth over the past fifteen / twenty years has largely been fuelled by a substantial reduction in the price of mobile services. Mobile consumer prices have particularly reduced in markets where operators have promoted abundance / value-for-money strategies: T-Mobile in the U.S., Free in France, Play in Poland, AirTel in India, to name only a few. Interestingly, the bold moves by these leading operators have inspired many challenger operator strategies across the world over the past decade.

As penetration appears to level-off with single digit growth in increasingly mature markets, prices also tend to stabilize. Since 2017, the global mobile voice price basket thus seems to plateau at around US$12-$13 globally.

Global mobile-voice price basket in USD (left axis) and mobile-voice subscriptions per 100 inhabitants (right axis), 2008-2019

Source: ITU

Global mobile-voice price basket in USD (left axis) and mobile-voice subscriptions per 100 inhabitants (right axis), 2008-2019

The operator’s perspective

While mobile penetration grows rapidly in a given market, most of the new customers acquired by an operator are first-time mobile customers (so-called “newcomers”). As a market matures and the mobile penetration growth slows down, an increasing proportion of new customers captured by an operator are thus customers churning from a competing operator vs. customers acquiring their first SIM card.

In typical mature markets, the total market commercial opportunity (total gross additions) is thus comprised of newcomers for <20% and churners for >80%.

Accordingly, the ability of an operator to continue growing its customer base as the mobile market matures will progressively depend less on attracting newcomers and more on its capacity to better retain its customers vs. its competitors.

Mastering the churn equation thus becomes the cornerstone of customer growth:

  • on the defensive side, an operator must be better than its competitors at retaining its customers,

  • on the offensive side, an operator must be better than its competitors at inducing churn from competition.

From massive campaigns to micro-segmented actions

To address the churn challenge, many operators pursue massive retention campaigns with the business objective of maintaining a large proportion of their customer base under a contractual commitment, typically targeting ~80% of customers bound by a commitment as a priority KPI.

Retention campaigns targeting wide pockets of customers at once thus require significant commercial investments in order to reach the ambitious rebinding objectives, particularly considering the difficulty to achieve granularity in the segmentation of at-risk customers and the difficulty to interpret churn predictions.

The Lifetime Analytics application enables marketing teams to i) identify clusters of at-risk customers based on proven churn factors and to sort out micro-segments within these clusters, and ii) propose highly customized commercial and care actions to retain these customers within a define time horizon. This micro segment approach allows for a better overall targeting of customers to be retained, enables better response rates, and allows to secure better overall retention economics.


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