back to article Telcos: up your prices, lose customers

Mobile providers rely on their customer base, yet unlike hardware manufacturers, developing a loyalty is difficult. With so much competition, increasing prices can have a significant impact and send customers sniffing elsewhere. Mobile tech website Ken's Tech Tips tracked the popularity of the UK's major mobile operators by …

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Holmes

Of course

The bean counters never factor in the exodus of customers when you stick up your prices beyond the competition, or the "race to the bottom" factor in customer service. To them, customers just sit there and pay them more money when they put the prices up.

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aye

but I imagine contract lengths also have something to say too. Not worth switching whilst in contract.

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very bad statistics, overinterpreted

Without any hint to what proportion of the entire market are switching this tells us *why* *some* people are switching. It doesn't tell us whether tariff changes make significant numbers switch provider.

So interesting though the trends shown may be, it's impossible to say whether this confirms or refutes the "consumers are generally a lazy lot who don't shop around" meme. I'd guess that meme is perfectly safe though ;)

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Headmaster

"consumers are generally a lazy lot who don't shop around"

That's a stereotype, not a meme.

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Tesco

Looks to my eyes that Tesco was already dropping before it stopped it's 500 mins for £10 deal.

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Simple answer

Stop giving the good deals only to new customers and we'll stop leaving.

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o2

Although I didn't leave them I went from a pay yearly tariff to PAYG when they changed their pricing. I was paying £25/year ish as I use the phone very little, but that would have risen to >£110. Now I have a £20 PAYG, which will last me all year.

So, although they didn't lose a customer, they lost money with the tariff change.

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Not just O2

I came to the end of a contract and switched to something cheaper with T-Mobile. I also shifted my wife's PAYG to them so they gained a customer, but the net cost per month is still less than I was paying for just me.

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uhm?

I'm looking at the graph, and it seems that the downward trend was already there in every single case, and didn't get worse after the tariff change. So, at least from looking at the graph, the conclusion that price hikes lose customers can't be supported.

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They still have a lot to learn

Don't they just! Will they start to copy BT's little tricks like taking money in advance for a quarter's rental then back-charging because they decided to increase at some point during the period already paid for?

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near-meaningless

This only measures people switching through this company's service; when I switched I didn't use them. Furthermore, it doesn't measure people who don't switch.

Better to display the (weak) data as the #of people switching from and to a particular supplier, not this market share thing, which may be untrue. People may not be switching to O2, but they may not be switching from it either.

What it does seem to show is that people who switch from this app switch to 3. That's all

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FAIL

What exactly does that graph show?

1) The Y axis for the graph seems to be "Ken's Tech Tips Index (Monthly)". That's completely meaningless - what on earth does it mean?

2) Is the Y scale linear or logarithmic? (I guess linear, because that's the default you'd use if you don't know what linear and logarithmic mean). Also, the lack of labels on the Y axis makes it hard to read.

3) The Y axis is labelled "(Monthly)", yet the graph appears to be a smooth curve. Are the parts between the month points real data, or are they made-up pretty wavey lines? (I suspect they're made-up pretty wavey lines. As other people have said, the graph seems to respond just before price rises, which is consistent with made-up data but not with real data).

4) What's the sample size for this data? And is it a random sample? If it's not a random sample, what are the biases? Is this biased towards the type of people who will compare prices online and find the cheapest deal? If so, then OF COURSE the data will show price sensitivity!

... ok, after looking at the linked article, the graph shows ( (number of customers joining the network) / (number of customers leaving) * 100). I.e. it's in percent. This makes the 100% point very important, as it's where a network switches from shrinking (score below 100) to growing (score above 100). So the lack of a horizontal line at 100% (or even a mark on the Y axis!) is a grave error.

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My thoughts exactly...

Also, the graph is in effect showing the first derivative of customer numbers, so interpretation is not as intuitive as for a basic "customer numbers" graph. A line that is rising, but below the magic "100" is not as good as a line that is declining, but lies above 100: the first is a decline in numbers, albeit a slowing decline, the second is a rise, but one that is beginning to form a plateau.

I'm reminded of Nixon, for some reason... ;)

For the record, I've never formally studied statistical analysis, but I do have a passing professional interest in how information is presented.

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Anonymous Coward

If you check out the originating site

This is based on a survey of just over 33,000 people who applied for a PAC code and agreed to a survey - the site implies that the survey was carried out when people applied for a PAC code through being guided by the site, but the actual data set selected does not appear anywhere I saw on my quick read through.

So, in essence we have a voluntary survey carried out on a non-specified data set of people who chose to move provider but keep their phone number.

This does not seem to deal with a lot of factors, including it only being people with a very strong opinion who fill in surveys, not everyone who changes provider keeps their mobile number, failure to identify the sample set renders the conclusions "suspect" at best and finally, the really big one - it does not take into account those who elected not to change telco, despite any contractual / service level changes.

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Anonymous Coward

Not really

As Fillippo suggests the graph doesn't show anything except that O2 data plan was successful.

However, while I think that consumer inertia generally allows companies to get away with increases, I suspect that the very aggressive contract mobile marketplace means that customers are liable to switch more readily.

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Vodafone - Tax avoiding scum

But since they have stopped paying tax in the UK they have dropped their prices.

Still a long way off the cheapest.

Using them condones they tax avoidance

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Anonymous Coward

... not tax Evasion

Who doesn't try and "aviod" tax (compared to scum who evade tax) ? I guess there are some people who would avoid buying that bottle of scotch at the duty free, it's a personal choice.

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WTF?

and what's wrong with tax avoidance?

I pay taxes and I hate it, I'd rather I was given all my own money and left to pump it into the economy as I see fit.

Who wouldn't want to avoid paying taxes? Given the chance and a legal loophole, you can bet your bottom dollar I'd be on that wind up. Why are you so bitter about it? It's hardly a company's fault for working within the law even if it is outside of the way the law was *intended*.

Your beef should be with the law makers not Vodafone.

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FAIL

Eh? graph does NOT support theories....

Orange was in a decline before tarrif, O2 recovered to almost where it was before, T-mobile went UP shortly after and why the climb, dip climb from T-mobile?

This is just some idiot analyst looking to try and fudge a cause to a chart.

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Anonymous Coward

The MVNO's

such as giffgaff are whomping not only the providers byut some landlines.

For instance my last BT bill was 50UKP for three months - for a grand total of 10 calls. Thats 5UKP per call!

My giggfagg phone costs me 10UKP per month and I have yet to use up the entire 250 minutes

as I start to text when I get low.

Given we have a Virgin landline with free ~1hr calls and 50Mb net connection, the BT line will veyr soon be disconnected.

Why can BT get away with back charges, and charging ~20UKP per month for a "dead" service when I can get ~800minutes, truly unlimited net and texts for the same amount via a PAYG mobile service? Also given NTL and BT's recent call connection charge increases, my GG mobile is now cheaper for an average of ~1 minute calls!

I thought fiends were stupid for dropping thier landlines and going mobile but

I think you have to be nuts to be a BT residential customer today.

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FAIL

Shameful article.

This article should be about poorly selected data sets and woefully mis-interpreted statistics not the twaddle it purports to be about.

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Anonymous Coward

Tesco???

People were stupid enough to go with Tesco?

Did they use their Club Card Points?

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