Superfast broadband could reduce annual churn rates for fixed broadband by three percentage points. This conclusion is based on the reduced churn rates that higher-speed services bring, Analysys Mason discovered as part of its analysis of the Connected Consumer 2013 survey.
Offering superfast broadband speeds to all customers could reduce annual churn rates by 3 percentage points per annum
If you ask 6610 consumers in Europe and the USA what one thing they will look for in their next fixed broadband service, most of them will say ‘a cheaper service’. However, 14 per cent of respondents in the multi-country survey who intended to leave their fixed broadband service provider in the next 6 months said that the reason that they were leaving their current provider was not price, but because their current service was not fast enough. This might not sound like a significant proportion of respondents, but if a typical operator had a monthly churn rate of 1.4 per cent, the impact of upgrading those customers to higher speeds could reduce this to 1.2 per cent per month – the equivalent of a 3 per cent annual increase in the customer base (or a 3 percentage point reduction in annual churn). By comparison, this is around twice the annual subscriber growth rate of major European operators such as Deutsche Telekom or Telefónica in their domestic markets, and comparable to that of Orange in France, according to Analysys Mason.
The trend is consistent across all of the European countries in the study: fewer higher-speed respondents intend to churn.