Network performance vital for user loyalty, says Ericsson ConsumerLab report

• New Ericsson consumer research on smartphone users shows that network performance is key to ensuring subscriber loyalty and low churn
• Improving user satisfaction with network performance increases operator revenue over subscriber lifetime and ensures a competitive advantage
• Smartphone users sometimes express concerns about the experience they get from current network performance

Improved network performance is vital for ensuring subscriber loyalty among smartphone users, and provides operators with a significant competitive advantage. These findings come from a new report from Ericsson (NASDAQ: ERIC) ConsumerLab, which also shows that current mobile networks don't always live up to user expectations. Up to 60 percent of smartphone users say they experience problems at least once a week and just over 30 percent encounter problems every day.

The ConsumerLab research looked into the factors that influence users' loyalty to operator brands, says Anders Kälvemark, Senior Advisor, Consumer Insights at Ericsson ConsumerLab.

"Our analysis shows that network performance is currently the prime driver of consumer loyalty to an operator brand, followed by value for money," he says. "That is almost three times the impact of the handset/device offering, for example. Consumer satisfaction with these factors has to be improved to affect loyalty in a positive way.

"Generally, consumers expect more from the services than what they receive. When service requirements such as reasonable waiting times and sufficient coverage are not met - especially when people are in transit - it is natural that consumer loyalty suffers."

To ensure a good user experience, content needs to appear on the screen quickly. Relatively low levels of satisfaction with network performance are often a result of smartphone users becoming tired of waiting.

However, it is not enough for operators simply to improve network performance in the hope that customers will notice. Communication is essential for improving customer perceptions. Users need to be aware that things have changed for there to be an impact on satisfaction levels, and for this to improve their loyalty to the operator.

The report also shows that a satisfied user is generally less likely to switch operator, leading to higher operator revenue over the user's lifetime.

About the report:

Ericsson ConsumerLab conducted online interviews with 1,000 smartphone users, aged 18 to 64, in each of the following 12 markets: Brazil, Chile, China, Indonesia, Japan, Mexico, Russia, South Korea, Sweden, Turkey, the UK and the US.

Loyalty was measured using the Net Promoter Score (NPS) metric.

All ConsumerLab reports can be found at www.ericsson.com/consumerlab

Link to report:
www.ericsson.com/res/docs/2013/consumerlab/keeping-smartphone-users-loyal.pdf

NOTES TO EDITORS

Ericsson Mobility Report: www.ericsson.com/ericsson-mobility-report

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Ericsson is a world-leading provider of communications technology and services. We are enabling the Networked Society with efficient real-time solutions that allow us all to study, work and live our lives more freely, in sustainable societies around the world.

Our offering comprises services, software and infrastructure within Information and Communications Technology for telecom operators and other industries. Today 40 percent of the world's mobile traffic goes through Ericsson networks and we support customers' networks servicing more than 2.5 billion subscriptions. 

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