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20th August 2008
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Home » Maximising Wireless Profit Program » 2003 » Extracting Higher Value from the Consumer Contract Segment » 

Reducing the Cost of Customer Acquisition and Retention

April 2003 (31 pages)
In 2000, Mobile Market Development conducted an International Benchmark study examining a number of key performance indicators across over 50 mobile operators worldwide. The study revealed that customer acquisition and retention costs typically accounted for at least 25% of mobile operator operational expenditure. For most operators in developing world markets, this figure has undoubtedly declined over the last two years. The share of opex accounted for by customer acquisition and retention is probably now much closer to 15%.

One of the reasons for this has been increased market maturity which has seen the number of new connections being added, reduce substantially. Additionally, the two years have many operators take proactive steps to reduce the cost incurred on a per connection basis. In this section of the report we highlight a wide range of initiatives taken by operators in the hope of substantially reducing customer acquisition and retention costs. We also track the impact of these initiatives over time and indicate whether they have had a lasting positive impact on the operational profitability of the operators involved.

Price: EUR 1,250.00 / GBP 1,000.00

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1	Handset Subsidies: Reducing the cost of Customer Acquisition	1

1.1	The Argument for Subsidy Removal	2

1.2	Subsidy Reduction Triggers	5

1.3	Exploiting Legal or Regulatory Arguments for the Removal of Subsidies	5

1.4	Challenges Associated with Subsidy Reduction	6

1.4.1	Overcoming Dealer Anxiety and Retaining Dealers to Retain Customers	6

1.4.2	Improving Supply Chain Management	6

1.4.3	Dealing With Customer Shock	7

1.4.4	Other Preparatory Steps	8

1.5	Need to Pressurise Manufacturers for Better Quality Handsets	8

1.6	Further Findings	9

1.7	Australia	11

1.7.1	Details of Handset Subsidy Reduction/Removal	12

1.7.2	Parallel Churn Prevention Measures	13

1.7.3	Impact on Financial Performance and Market Share	14

1.7.4	Channel and Other Impacts	14

1.7.5	Update	15

1.8	France	16

1.8.1	Channel and Other Impacts	18

1.9	Germany	19

1.10	Greece	19

1.10.1	Background	19

1.10.2	Details of Handset Subsidy Reduction/Removal	20

1.10.3	Impact on Financial Performance	21

1.10.4	Related Initiatives	21

1.10.5	Impact on Handset Replacement Cycle	23

1.11	Ireland	23

1.11.1	Background	23

1.11.2	Details of Handset Subsidy Reduction/Removal	23

1.11.3	Impact of Subsidy Reduction	25

1.12	Portugal	25

1.12.1	Background	25

1.12.2	Details of Handset Subsidy Reduction/Removal	25

1.12.3	Related Initiatives	26

1.13	Impacts	27

1.14	Spain	28

1.14.1	Background	28

1.14.2	Parallel Initiatives	28

1.14.3	Telefonica - Financial Impact of Handset Subsidy Reduction	29

1.14.4	Competitor Reaction	30

1.14.5	Impact on Churn	30

1.14.6	Impact on Handset Lifecycle/Equipment upgrades	30

1.14.7	Impact on Connection Levels	30

1.15	Netherlands	31

1.15.1	Background	31

1.15.2	Details of Handset Subsidy Reduction/Removal	31

1.15.3	Channel and Other Impacts	32

1.15.4	Subsidies Beckoning Once Again	32

1.16	Denmark - Orange	33

1.16.1	Background	33

1.16.2	Details of Handset Subsidy Reduction/Removal	33

1.16.3	Competitor Reaction	33

1.16.4	Other Impacts	33

1.16.5	Subsidy Reintroduction	34

1.17	Other Markets	34

1.17.1	South Korea	34

1.17.2	Hong Kong	34