Nearly 10 percent of current wireline customers surveyed by Standard & Poor’s Equity Research Services said they would take their wireline numbers to wireless carriers based on the recently implemented local number portability mandate, which S&P noted could intensify wireless substitution efforts next year and lead to greater access line losses for wireline operators.
S&P telecommunications services equity analyst Todd Rosenbluth added that the survey results found no evidence that the youth market is more prone to cut the cord, although he did admit the prepaid market, which traditionally targets the youth market, is just emerging.
While wireless carriers are expected to see an influx of former wireline customers beginning next year, Rosenbluth noted he does expect a sizable increase in customer churn from one wireless carrier to another as a result of LNP, with 4 percent of current wireless customers suggesting they would switch carriers regardless of when their current contracts expire and an additional 16 percent of those surveyed planning to switch once their contracts are up.
For those carriers looking to attract those potential customers, S&P’s survey found a majority of respondents believe price and quality of service are the most important factors when choosing wireless operators, suggesting aggressive minute packages and wireless capital spending should increase next year.
The survey also questioned the ability of aggressive bundling of data services with traditional services to increase customer loyalty, though S&P said telecommunications providers could find success with bundled calling minute offerings spread between wireline and wireless services.
“We expect all carriers to develop aggressive bundling strategies, particularly wireline and wireless services under one plan, as they try to reduce customer churn, and we believe bundling should be catered toward sharing minutes between wireline and wireless services,” Rosenbluth said.
