New Survey Shows Verizon iPhone Will Have Major Impact on U.S. Wireless Service Providers

Can AT&T Forestall Large-Scale Defections?

   

The details of a Verizon iPhone have finally been released, but what impact will this long expected move actually have on U.S. wireless service providers and their subscribers?

A new ChangeWave survey of 4,050 consumers, completed just days before the announcement, focused on the impact of a Verizon iPhone on the major U.S. Wireless Service Providers.

An Industry in Upheaval

First, we asked survey respondents how likely they were to change their wireless service provider in the next 90 days.

A total of 10% said they plan on switching providers – 2-pts higher than a previous ChangeWave survey in September and the highest churn level of the past 18 months.

Importantly, when we compared the churn rates for the top wireless providers, we found major differences.

Only 4% of Verizon’s customers plan to switch in the next 90 days. In comparison, 10% of Sprint/Nextel’s customers say they plan to switch, as do 15% of both T-Mobile’s and AT&T’s.

As the following chart shows, AT&T’s churn rate is its worst ever in a ChangeWave survey.

What’s behind the weakening loyalty of AT&T customers?

First, better than two-in-five likely switchers from AT&T cite Poor Reception/Coverage (42%) as their top reason for leaving, followed by Dropped Calls (27%).

Secondly, the weakening loyalty of AT&T wireless customers is directly attributable to the upcoming release of a Verizon iPhone.

To gauge how many AT&T customers are going to switch to Verizon when they begin offering the iPhone, we asked:

For those who currently use AT&T as your wireless service provider, do you plan to switch to Verizon if-and-when they begin offering the iPhone*


*Note: This survey was conducted in late December prior to the Verizon iPhone announcement.

A total of 16% of AT&T subscribers say they’ll switch to Verizon once it begins offering the iPhone. Another 23% say they don’t know if they’ll switch.

Importantly, current Apple iPhone owners are the most likely group of all to switch, with more than one-in-four (26%) saying they’ll leave AT&T for Verizon.

Note that among all AT&T subscribers planning to switch, two-in-five (41%) say they’ll do it within the first three months of the iPhone’s release – and another 31% within the first year.

A Bright Spot for AT&T

Despite the seemingly inevitable hemorrhaging of AT&T’s subscriber base, there was one bright spot for the wireless giant – a significant improvement in its dropped call rating.

Here’s a look at AT&T’s dropped call ratings vs. Verizon’s in ChangeWave surveys dating back to September 2008:

As the chart shows, while AT&T continues to struggle in this very important area and trails Verizon by a wide margin, it has made significant advances since our previous survey – improving from its all-time worst 6.0% rating last September to 4.7% in the current survey.

The findings suggest AT&T is now taking concrete steps to try to improve long-standing service issues. But can it do so quickly enough to forestall large-scale defections to Verizon?

Not according to our ChangeWave survey results. The Verizon iPhone is causing a major transformational shift in the wireless industry, and for now the momentum clearly favors Verizon.

To review the complete ChangeWave survey results, including the heated competition for future market share among Verizon, AT&T, Sprint/Nextel, and T-Mobile, follow the link below:

The complete ChangeWave report is available here.

Additional report details include:

• Customer Satisfaction ratings for the major Wireless Service Providers

• Dropped Calls Rates – Past 90 Days by Wireless Provider

• Most Important Reasons for Switching – By Provider

• Wireless Providers Best Positioned to Gain from Customer Switching

• What AT&T Can Do to Retain At-Risk Customers Who Plan on Switching

• Tiered Data Plan Trends in the U.S.

• A Look at the Corporate Market: Wireless Service Provider Trends


Article printed from InvestorPlace Media, http://investorplace.com/2011/01/impact-verizon-apple-iphone-wireless-service-providers/.

©2014 InvestorPlace Media, LLC

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