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Cellular Phone Forum / Providers / Cingular / October 2004Cingular's concern CHURN
Omitted from the USENET discussion of Cingular's quarterly results was this statement: "Average monthly subscriber churn was 2.8 percent" <http://www.prnewswire.com/cgi-bin/micro_stories.pl?ACCT=088644&TICK=CING UL1&STORY=/www/story/10-20-2004/0002289150&EDATE=Oct+20,+2004> That means that 32.6 % of customers per year are LEAVING Cingular for another carrier; and that number can only be increasing with the current state of "My Account" on the web pages which continues to be a total fubar since the recent change, which CSR's are taught to misidentify as an upgrade. AT&T Wireless is still scaring customers with a churn rate of 3.7% in Q3. That's an annual rate of 44.4%. And Verizon is about to launch promotions trying to snare many of those folks as the merger takes effect. <http://www.attwireless.com/wirelessir/downloads/3Q04EarningsPressRelease .pdf> <http://www.theledger.com/apps/pbcs.dll/article?AID=/20040927/ZNYT01/4092 70394/1001/BUSINESS> By contrast the Nextel Churn rate during Q3 2004 was 1.5 % <http://phx.corporate-ir.net/phoenix.zhtml?c=63347&p=irol-newsArticle&t=R egular&id=634513&> Sprint's churn "was a little less than 2.7%", which they try to SPIN as a "seasonal variation". <http://www3.sprint.com/PR/CDA/PR_CDA_Press_Releases_Detail/1,3681,111224 4,00.html> I'm not sure Verizon has released its Q3 numbers yet, but they have been running UNDER 2.0% <http://www.forbes.com/home/wireless/2004/10/11/cx_de_1011mondaymatchup.h tml> In August TMobile reported a Q2 monthly churn rate of 2.4%. <http://www.t-mobile.com/company/investors/financial_releases/2004_Q2.asp TMobile reported it costs it $318 for each new customer it adds, which in the low range for the industry; but shows how COSTLY churn is. Cingular omitted that number from its press release for Q3. Each month when between 2 and 3 % of your customers leave, it costs a cellular carrier over $300 each to replace that customer (advertising, phone costs subsidy, etc). If you have to replace a million customers (DO THE MATH) it adds up, and subtracts from potential profits. >AT&T Wireless is still scaring customers with a churn rate of 3.7% in Q3. Scaring investors -- customers don't care about churn. Regardless, that's actually not bad in the context of the merger. >And Verizon is about to launch >promotions trying to snare many of those folks as the merger takes >effect. But will still fall to #2 in cellular.  SignatureBest regards, HELP FOR CINGULAR GSM & SONY ERICSSON PHONES: John Navas <http://navasgrp.home.att.net/#Cingular > [POSTED TO alt.cellular.cingular - REPLY ON USENET PLEASE] > > >AT&T Wireless is still scaring customers with a churn rate of 3.7% in Q3. > > Scaring investors -- customers don't care about churn. Regardless, that's > actually not bad in the context of the merger. AT&T Wireless is scaring customers away I meant to say. > >And Verizon is about to launch > >promotions trying to snare many of those folks as the merger takes > >effect. > > But will still fall to #2 in cellular. Initially for sure, but if the high churn numbers aren't corrected Verizon could be back on top within 2 years > > [POSTED TO alt.cellular.cingular - REPLY ON USENET PLEASE] > > [quoted text clipped - 4 lines] > > AT&T Wireless is scaring customers away I meant to say. Well, Phil- interesting slant, but the merger will still create the nation's largest carrier. > > >And Verizon is about to launch > > >promotions trying to snare many of those folks as the merger takes [quoted text clipped - 4 lines] > Initially for sure, but if the high churn numbers aren't corrected > Verizon could be back on top within 2 years Only if they improve some serious oversaturation of the network in areas and dramatically improve their cutomer service. Complaints of dropped calls and poor service are rapidly climbing, and their safety net as 'the nation's largest network' is about to go down the toilet. >> >AT&T Wireless is still scaring customers with a churn rate of 3.7% in Q3. >> >> Scaring investors -- customers don't care about churn. Regardless, that's >> actually not bad in the context of the merger. > >AT&T Wireless is scaring customers away I meant to say. GSM migration is probably scaring some customers away. Likewise the merger, although it's probably a less significant factor. >> >And Verizon is about to launch >> >promotions trying to snare many of those folks as the merger takes [quoted text clipped - 4 lines] >Initially for sure, but if the high churn numbers aren't corrected >Verizon could be back on top within 2 years While churn is important, net additions are what matter in this context. Together, Cingular and AT&T Wireless will have about 46 million wireless subscribers combined, as compared to 37.5 million customers at No. 2 Verizon Wireless, a difference of 8.5 million subscribers. Thus it would be difficult for Verizon to retake the #1 spot anytime soon. To do so in 2 years would mean a net gain for Verizon on Cingular of more than a million subscribers per quarter, which I think is unlikely. SignatureBest regards, HELP FOR CINGULAR GSM & SONY ERICSSON PHONES: John Navas <http://navasgrp.home.att.net/#Cingular > >Initially for sure, but if the high churn numbers aren't corrected > >Verizon could be back on top within 2 years [quoted text clipped - 7 lines] > mean a net gain for Verizon on Cingular of more than a million subscribers per > quarter, which I think is unlikely. Not difficult at all. DO THE MATH. The CHURN alone will hold down the growth of the new Cingular, and Verizon with a low churn and faster growth rate will likely overtake Cingular in about 2 years. Then with its greater profitablility Verizon can afford some marketing curveballs to throw at Cingular. Depends on your definition of "soon", and whether with rose colored glasses you think Cingular can cure problems with AT&T Wireless. I see nothing but more issues for Cingular. Three years in Cingular hasn't YET fully digested all the pieces that came together to create Cingular as witnessed by grief customers still have with roaming or calling 611 when they travel 1000 miles out of their home area. And now we witness a complete foobar on the "My ACCOUNT" webpage, a small precusor of the likely problems in absorbing the behemoth of AT&T Wireless. >> >Initially for sure, but if the high churn numbers aren't corrected >> >Verizon could be back on top within 2 years [quoted text clipped - 11 lines] >growth of the new Cingular, and Verizon with a low churn and faster >growth rate will likely overtake Cingular in about 2 years. ... As I wrote, while churn is important, net additions are what matter in this context. In the most recent quarters for which numbers are available, Verizon had a net gain of about 700 thousand subscribers on Cingular and ATTWS. That's well below the pace needed to catch Cingular within your 2 years, and since these quarters were unusually favorable to Verizon, future net gains are likely to be lower, not higher. Thus your projection is unlikely. SignatureBest regards, HELP FOR CINGULAR GSM & SONY ERICSSON PHONES: John Navas <http://navasgrp.home.att.net/#Cingular > [POSTED TO alt.cellular.cingular - REPLY ON USENET PLEASE] > [quoted text clipped - 23 lines] > since these quarters were unusually favorable to Verizon, future net gains > are likely to be lower, not higher. Thus your projection is unlikely. Why should it be lower?, you're reaching. Why do you snip out half my argument when you respond? Quite childish: Not difficult at all. DO THE MATH. The CHURN alone will hold down the growth of the new Cingular, and Verizon with a low churn and faster growth rate will likely overtake Cingular in about 2 years. Then with its greater profitablility Verizon can afford some marketing curveballs to throw at Cingular. Depends on your definition of "soon", and whether with rose colored glasses you think Cingular can cure problems with AT&T Wireless. I see nothing but more issues for Cingular. Three years in Cingular hasn't YET fully digested all the pieces that came together to create Cingular as witnessed by grief customers still have with roaming or calling 611 when they travel 1000 miles out of their home area. And now we witness a complete foobar on the "My ACCOUNT" webpage, a small precusor of the likely problems in absorbing the behemoth of AT&T Wireless. And others predict one year not two for Cingular to lose its lead: "Analysts are predicting that the new Cingular could lose 6% to 10% of its 46.7 million subscribers over the next twelve months. If that occurs, Verizon Wireless - jointly owned by Verizon (VZ) and Vodafone (VOD), and with a current subscriber base of 40.4 million - could regain the number one carrier spot it will lose once the Cingular-AWE merger is closed. AWE's churn is already growing, from 2.6% per month at the end of 2003, to 3.4% in the most recent quarter. Cingular and AWE were the only two companies to lose subscribers in Q2, as Verizon Wireless, Nextel (NXTL), T-Mobile and Sprint PCS each showed gains. " http://www.findprofit.com/saying.php3 > > [POSTED TO alt.cellular.cingular - REPLY ON USENET PLEASE] > > [quoted text clipped - 57 lines] > > http://www.findprofit.com/saying.php3 Old news- what about Q3? >> "Analysts are predicting that the new Cingular could lose 6% to 10% of >> its 46.7 million subscribers over the next twelve months. If that [quoted text clipped - 9 lines] > >Old news- what about Q3? ATTWS and Cingular both added net subscribers in Q3. Verizon Wireless probably did as well, although its numbers don't yet seem to be available. SignatureBest regards, HELP FOR CINGULAR GSM & SONY ERICSSON PHONES: John Navas <http://navasgrp.home.att.net/#Cingular >> As I wrote, while churn is important, net additions are what matter in this >> context. In the most recent quarters for which numbers are available, [quoted text clipped - 4 lines] > >Why should it be lower?, In a stroke, Cingular will go from being the spectrum-poor major carrier to being the spectrum-rich major carrier, putting it in a good position to extend its new lead over Verizon. >you're reaching. You have that backwards. >Why do you snip out half my argument when you respond? Quite childish: Again, you have that backwards. I actually snip down to (more than) the relevant parts, as per Usenet guidelines. >Not difficult at all. DO THE MATH. The CHURN alone will hold down the >growth of the new Cingular, and Verizon with a low churn and faster >growth rate will likely overtake Cingular in about 2 years. As I've shown, the math doesn't work out that way. >And others predict one year not two for Cingular to lose its lead: > >"Analysts are predicting that the new Cingular could lose 6% to 10% of >its 46.7 million subscribers over the next twelve months. ... The key word there is "could" (rather than will). And note the lack of actual analyst names. Anonymous analysts tend to be no more accurate than random guessing. SignatureBest regards, HELP FOR CINGULAR GSM & SONY ERICSSON PHONES: John Navas <http://navasgrp.home.att.net/#Cingular Why would anyone use Verizon is beyond me... They are so much more expensive and their service is not any better. To me, a phone is a phone... and the cheapest wins my business.. I do carry a mobile phone. But are we better off than when mobile phones were out of reach to most individuals? I'd rather have leisure time and money do do what I enjoy instead of chasing technology. BTW, I love technology but I'm not willing to pay a premium for it. With what most people spend on cable, broadband, mobile phone, computers and gadgets every year, one can take a nice vacation abroad and learn a lot more about the world. >> [POSTED TO alt.cellular.cingular - REPLY ON USENET PLEASE] >> [quoted text clipped - 68 lines] > > http://www.findprofit.com/saying.php3 > > >Initially for sure, but if the high churn numbers aren't corrected > > >Verizon could be back on top within 2 years [quoted text clipped - 15 lines] > with rose colored glasses you think Cingular can cure problems with AT&T > Wireless. Churn has no effect on the equation- if Cingular continues to add subscribers (notice the continue- they are adding as we speak), Verizon has to add 1 million more than Cingular does in every quarter for the next two years. Due to WLNP, churn is not the indicator of good service that it used to be. Phil- you are a classic example of why that is true. You whored yourself out to the carrier that gave you the most, moaned and whined about the entire situation, and now apparently find your self tied to yet another carrier you dislike. > I see nothing but more issues for Cingular. Three years in Cingular > hasn't YET fully digested all the pieces that came together to create [quoted text clipped - 3 lines] > precusor of the likely problems in absorbing the behemoth of AT&T > Wireless. Hm- sounds just like VZW- struggling to put together the pieces of the conglomerate and having many issues as a result. Except with VZW, you can overselling the network to the list of complaints. It will be hard to add a million more than Cingular when the network can't handle what they already have. >> I see nothing but more issues for Cingular. Three years in Cingular >> hasn't YET fully digested all the pieces that came together to create [quoted text clipped - 9 lines] >million more than Cingular when the network can't handle what they already >have. Indeed -- in a stroke, Cingular will go from being the spectrum-poor major carrier to being the spectrum-rich major carrier, putting it in a good position to extend its new lead over Verizon. SignatureBest regards, HELP FOR CINGULAR GSM & SONY ERICSSON PHONES: John Navas <http://navasgrp.home.att.net/#Cingular > I see nothing but more issues for Cingular. Three years in Cingular > hasn't YET fully digested all the pieces that came together to create [quoted text clipped - 3 lines] > precusor of the likely problems in absorbing the behemoth of AT&T > Wireless. I'll toss in my two bits here. Although Verizon would be my 2nd choice over Cingular (or 1st choice for another year or so if I didn't have a GAIT plan) I think the Cingular/ATTWS merger will permanently knock them out of the #1 spot. First of all the "My Account" problem is a non-issue. While it may significantly affect YOU and a few other power users on this board, the VAST majority of Cingular customers DON'T EVEN KNOW THAT FUNCTION EXISTS much less have the ability to access it. Most cellular users still get the paper bill and still pay that bill via the mail. Even the ones that pay online wouldn't be overly bothered if the page didn't work--they'd just grumble and pay it offline. And remember, a lot of Cingular customers really come FROM AFFILIATES such as Hawk Electronics here-- those customers have never had access to the Cingular "My Account" info at all. Hawk now has their own version but with bill paying and ring- tone downloading only--nowhere near all the features as Cingular's. One other point. In 2007 the AMPS requirement sunsets. Cingular and a lot of the other large carriers will most likely DROP AMPS from their towers. Guess what. Verizon depends on that AMPS coverage to jack up their coverage claims--without the ability to roam on other carriers AMPS systems Verizon's coverage area is going to shrink drastically whereas by then those carriers will have converted to GSM so Cingular's coverage won't. Compare the Verizon national map to the Enhanced Services map if you want to see what that's going to do to their coverage. With AMPS now they can honestly say they offer nation wide coverage--without AMPS they simply won't be able to say that--even today native CDMA isn't that common away from the large cities and it certainly won't be able to compete with GSM once all the TDMA/AMPS carriers have converted. SignatureJud Dallas TX USA > > [POSTED TO alt.cellular.cingular - REPLY ON USENET PLEASE] > > [quoted text clipped - 13 lines] > Initially for sure, but if the high churn numbers aren't corrected > Verizon could be back on top within 2 years Your assuming that Verizon has no churn of its own. It wont affect any of the companies as much as you think. Churn fluctuates. Month to month, day to day even but they don't post a daily tally. So if churn gets to be too big a problem, Cingular will adjust its rates and promotions to attract the people back. CT > > > [POSTED TO alt.cellular.cingular - REPLY ON USENET PLEASE] > > > [quoted text clipped - 25 lines] > back. > CT No such assumption. Read the thread. Verizon's churn has stayed below 2% and was 1.5% last quarter. Navas (as always snipped out the details that might contradict his posturings). Cingular WILL have grief integrating AT&TWS ! They have yet to integrate the pieces that created Cingular 4 years ago. Just go 1000 miles from home and see the grief you have calling 611, or roaming to prove that. And one can't adjust rates and promotions infinitely or profits go down the tube, as AT&TWS found out last winter, giving away phones Cingular was charging $200 or $300 for, and the CHURN was still the industry's highest. >Cingular WILL have grief integrating AT&TWS ! Probably not too much, since their networks and infrastructure are highly compatible. >They have yet to integrate >the pieces that created Cingular 4 years ago. Not really comparable. >Just go 1000 miles from >home and see the grief you have calling 611, or roaming to prove that. I don't have any problem. What does that prove? ;-) >And one can't adjust rates and promotions infinitely or profits go down >the tube, as AT&TWS found out last winter, giving away phones Cingular >was charging $200 or $300 for, and the CHURN was still the industry's >highest. That wasn't what got ATTWS into trouble, and in any event the company did pretty well in holding on to its customer base -- see numbers I posted previously. SignatureBest regards, HELP FOR CINGULAR GSM & SONY ERICSSON PHONES: John Navas <http://navasgrp.home.att.net/#Cingular > [POSTED TO alt.cellular.cingular - REPLY ON USENET PLEASE] > > >Cingular WILL have grief integrating AT&TWS ! > > Probably not too much, since their networks and infrastructure are highly > compatible. Integrating the towers yes, integrated the customers, NO WAY. > >They have yet to integrate > >the pieces that created Cingular 4 years ago. > > Not really comparable. Correct, ATTWS will be much more difficult. > >Just go 1000 miles from > >home and see the grief you have calling 611, or roaming to prove that. > > I don't have any problem. What does that prove? ;-) You never have a problem, too you (and only you) Cingular is PERFECT. If you are in a different piece (a SWB, a PacBell, an AmeriTech, a SNET, a Bell South piece, a Houston Cellular piece), none are fully integrated yet 4 years later after being combined into Cingular. > >And one can't adjust rates and promotions infinitely or profits go down > >the tube, as AT&TWS found out last winter, giving away phones Cingular [quoted text clipped - 4 lines] > pretty well in holding on to its customer base -- see numbers I posted > previously. It most certainly was with respect to profitability. Holding on is not the same as adding. Yes, ATTWS held on in 2004, Verizon added 1,900,000 the last quarter; and at that rate WILL pass Cingular as biggest cellular carrier in 2 years. > > [POSTED TO alt.cellular.cingular - REPLY ON USENET PLEASE] > > [quoted text clipped - 4 lines] > > Integrating the towers yes, integrated the customers, NO WAY. And you say this based on what professional experiance? > > >They have yet to integrate > > >the pieces that created Cingular 4 years ago. > > > > Not really comparable. > > Correct, ATTWS will be much more difficult. Proof? URL? > > >Just go 1000 miles from > > >home and see the grief you have calling 611, or roaming to prove that. > > > > I don't have any problem. What does that prove? ;-) > > You never have a problem, too you (and only you) Cingular is PERFECT. And every cellular company you have subscribed to has been the antichrist. > If you are in a different piece (a SWB, a PacBell, an AmeriTech, a SNET, > a Bell South piece, a Houston Cellular piece), none are fully integrated [quoted text clipped - 16 lines] > and at that rate WILL pass Cingular as biggest cellular carrier in 2 > years. Yeah- and you'll finally find a carrier that suits your whiney a.s. >> >Cingular WILL have grief integrating AT&TWS ! >> >> Probably not too much, since their networks and infrastructure are highly >> compatible. > >Integrating the towers yes, integrated the customers, NO WAY. Back end systems too. >> >They have yet to integrate >> >the pieces that created Cingular 4 years ago. >> >> Not really comparable. > >Correct, ATTWS will be much more difficult. Easier. >> >Just go 1000 miles from >> >home and see the grief you have calling 611, or roaming to prove that. [quoted text clipped - 4 lines] >a Bell South piece, a Houston Cellular piece), none are fully integrated >yet 4 years later after being combined into Cingular. Been there; done that -- no problem. >> >And one can't adjust rates and promotions infinitely or profits go down >> >the tube, as AT&TWS found out last winter, giving away phones Cingular [quoted text clipped - 6 lines] > >It most certainly was with respect to profitability. Irrelevant. >Holding on is not the same as adding. It did add. >Yes, ATTWS held on in 2004, Verizon added 1,900,000 the last quarter; >and at that rate WILL pass Cingular as biggest cellular carrier in 2 >years. Unlikely (as I showed in earlier posts). SignatureBest regards, HELP FOR CINGULAR GSM & SONY ERICSSON PHONES: John Navas <http://navasgrp.home.att.net/#Cingular |
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