In search of [network] excellence: a 12-country survey finds Asia cellular users are more demanding than ever of their mobile operator, with more than 25% thinking about changing networks for more competitive prices and better coverage

Telecom Asia, June, 2004 by Joseph Waring

Mobile users in Asia are less satisfied with their network operators than a year ago, with 33% more people indicating they're likely to change networks within the next six months. Highlighting the level of uncertainly, three times as many users said they're not sure if they'll make a network switch than in 2003, according to the TNS 2004 Asia Telecoms Index, a survey of more than 6,700 mobile users in 12 Asia-Pacific markets.

The annual survey, which covers everything from application usage to user satisfaction, was conducted in April. It was expanded this year to include Australia and New Zealand. The results showed no major shift in application usage patterns, but there were significant increases in usage of many data applications across all markets (although from a small base). The largest change was seen in downloading/listening to music, which increased fourfold from last year. Downloading of games rose slightly while 3% of users said they played multiplayer games online.

Across Asia Pacific, 73% of all respondents said that they are not likely to change their network provider in the next six months, down from 85% in the 2003 survey. More than a quarter of those contacted in China, Hong Kong, Thailand and Vietnam indicated they were either very or quite likely to switch.

"Asians are becoming more sophisticated and demanding from their mobile network providers," said Chi Wing Chan, regional director of telecoms & technology at TNS, a global market research company. "With the continuous deregulations and introduction of new networks in Asia such as 3G in Hong Kong and CDMA ix in China, Asia consumers are having more bargaining power over the operators."

Users in Japan and Korea appear most satisfied with their service as just 7-8% of those contacted said they were likely to make a change--half the average. The Korean network providers have the least to worry about with 87% of respondents saying they are not likely to change.

In Hong Kong, a market where it seems consumers switch service providers almost as often as they switch phones, 9% of those surveyed said they were very likely to change networks--three times higher than the average across all 12 regions. Hong Kong is also a market in which consumers apparently know what they want--just 1% said they weren't sure or didn't know if they would change networks. This compares to 24% in Japan who said they weren't sure--more than double the average of 11%. In last year's 11-country survey just 3% said they weren't sure. This more than threefold increase indicates that many are keeping their eye out for a better deal as operators race to rolling out new promotions and services.

While the likelihood of switching networks sometimes differs sharply by region, there were no significant differences by age group, sex or employment level. As one might expect, there was a slight upward trend toward not making a change with the older groups--moving gradually from 73% for the 20-29 age group up to 78% for those 60-69.

Pre-paid users were twice as likely to want to change than post-paid owners. Some 22% of pre-paid customers said they were very or quite likely to switch networks in the next six months. Post-paid users, however, were two times as likely to be unsure of whether would change than their pre-paid counterparts--14% vs 7%.

Churn factors

The top three reasons for wanting to switch were uncompetitive pricing (22%) poor coverage (17%) and bad reception (14%), although there were huge differences between markets. The results, which included only those saying they are likely to change networks, are almost identical to last year, except users seem to be experiencing more reception problems--just 9% in 2003. Surprisingly, poor coverage was cited by 33% of users in Korea as a reason to change networks. Other countries where respondents said coverage was the main reason for changing were Malaysia (37%), India (31%) and Thailand (30%).

In Singapore pricing was by far the most important factor, with 48% indicating price and just 6% citing poor coverage as key drivers for wanting to switch. Uncompetitive pricing was also a key reason in Korea (35%), Thailand (31%) and Australia (31%). Malaysia, Vietnam and India were markets where price wasn't an important factor, with just 11-14% of respondents listing pricing as a reason for switching.

Hanis Harun, TNS regional director of telecoms Asia Pacific and coordinator of the survey, says: "Similar to our study last year, we find that in the more developed telecoms markets, like Hong Kong, Singapore and Australia, churn drivers tend to relate to pricing. While in the less developed telecoms markets like Malaysia, Vietnam and China, the basics of reception and coverage are still the primary reasons for churning."

Interestingly, twice as many pre-paid users (6%) cited problems with billing as a factor for change than post-paid respondents. Considering pre-paid is suppose to be hassle free, this is perhaps an area for operators to explore.