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Mobile Operators Risk Losing a Third of their Customers

6th July, 2004

Europe : Operators creating £3 billion in customer churn by prioritising expansion over quality of service Mobile operators risk losing a third of their customers (35%) who feel that the service they are receiving is not up to scratch, according to research announced by LogicaCMG today.

Inset is Derek Kemp of LogicaCMG, quoted below.

This could cost the recovering telecoms industry in the UK an estimated £3 billion* this year in customer churn as operators focus on growth and expansion strategies over improving quality of service.

The survey highlights a disparity between operators and their users as mobile network providers focus on business expansion at the expense of improving the systems key to providing better customer service. An alarming 86% of senior managers surveyed across UK mobile operators admitted quality of service was not their number one priority in 2004. Instead, 22% of mobile industry managers emphasised company expansion as the most important business issue this year – a stark contrast to last year, when 35% said customer service topped the agenda.

In addition, 28% of unhappy customers will contact their service provider before potentially taking action to leave the network. This represents a growing burden on network call centre services, which in turn need to focus on service excellence to stem additional customer churn.

Derek Kemp, managing director, UK telecoms, LogicaCMG, said: “Mobile operators need to carefully balance the desire to acquire new customers against the quality of service delivered, particularly if you consider the maxim that it costs four times as much to attract a new customer than to retain an existing one. Whilst a more bouyant mobile market offers great opportunities for growth, our research illustrates that quality is the key for consumers and vast numbers of subscribers are ready to change operator if they don’t feel it is up to scratch. With £3 billion of the market up for grabs, there are clearly significant rewards for operators that prioritise improving business processes and systems around quality of service and customer Service Level Agreements at the top of their business agenda.”

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