Mobile subscribers down — prepaid up

Apparently, this is an ongoing trend: For the ninth consecutive quarter, subscriber churn (i.e., turnover) has increased. More and more people worldwide are just saying no to contracts that limit the ways in which they can use their cellular phones. And to that, we say “good for you.” Contracts are good in that they save you money over the long haul. But with hefty contract termination rates, they also hinder your flexibility. It appears that this flexibility is becoming more and more attractive in this modern age. The turnover rate for Q1 2007 was 2.5% per month. We’re fairly certain that these people didn’t drop their cell service completely; after all, more and more people are ditching the landline in favor of cellular. Heck, you can even port your landline to your cell phone now. These turned over subscribers, presumably, are taking the prepaid route. “The increase in [turnover] highlights the challenge of managing subscriber growth in many prepaid-centric emerging markets.” This makes total sense. As we’ve said plenty of times, prepaid used to be the object of scorn, as many people saw it as a service for those with poor credit. As time wears on, though, many people are seeing that prepaid offers them the flexibility they desire. And, if you’re smart about it, you can find a prepaid plan for very close to, if not lower, than your current contract rate. Now, here’s the question: will the release of the iPhone this quarter help buck that trend? We suppose we’ll have to wait until August or September to find that out. [Computerworld]]]>