Customer loyalty the next battleground for carriers

Nearly half of current feature phone owners could switch carriers in the next 12 months, and Sprint appears to be in jeopardy of losing a large number of customers.

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Sprint might have a customer loyalty problem. Lynn La/CNET

Customer loyalty -- or the lack thereof -- might prove to be an issue for US carriers in the next year, according to new data from research firm Kantar Worldpanel.

Over the next 12 months, 44 percent of feature phone owners planning to get a smartphone are at the very least considering switching current carriers, Kantar reported Wednesday. A little over one-quarter of feature phone owners will be switching carriers in the next year.

Feature phones are quickly losing steam in the mobile space. For the first time recently, the devices are no longer the most popular mobile gadget purchases, being replaced by smartphones. Although carriers might prefer that -- there's more money in data devices, after all -- they might be a little more concerned now that Kantar's data is out.

In addition to looking at general consumer plans, the company examined customer loyalty to the top carriers in the US during the first quarter of the year. Kantar found that 91 percent of Verizon's current smartphone customers have no plans of going elsewhere, followed by 89 percent of T-Mobile customers. AT&T came in third place at 83 percent smartphone customer loyalty. Sprint was last at 74 percent.

It was an even more concerning story on the feature phone side, with 60 percent of Sprint feature phone customers saying they'd stick with their current carrier. AT&T was tops among its own feature phone customers, with 75 percent loyalty.

So, what ultimately determines a customer's loyalty? Devices aren't nearly as important as one might think.

"The data points collected from smartphone owners and intenders indicate that while device portfolios and customer care are important, the real battleground in carriers' acquisition and retention is quality of service and competitive pricing," Kantar Worldpanel Comtech Chief of Research Carolina Milanesi wrote in a statement.

CNET has contacted US carriers for comment on the report. We will update this story when we have more information.

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About the author

Don Reisinger is a technology columnist who has covered everything from HDTVs to computers to Flowbee Haircut Systems. Besides his work with CNET, Don's work has been featured in a variety of other publications including PC World and a host of Ziff-Davis publications.

 

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