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Telecom Report 2017 1Arrows indicate significantly higher than comparison group at 95% confidence interval

Telecom Report2017CONSUMER ATTITUDES AND LOYALTY


Current Wireless Carrier Current Wireless Carrier

The telecom industry has seen many changes over the past few years. Verizon and AT&T are striving to maintain their status as

industry leaders, while T-Mobile is disrupting the marketplace with its Uncarrier movement. Sprint is working hard to attract new

customers, while the ever-growing number of pre-paid budget offerings slowly chip away at the post-paid market share. In this

report, we explore usage patterns among Americans when it comes to their wireless service, as well as attitudes towards different

carriers.

Verizon and AT&T are the market frontrunners and boast the largest numbers of subscribers, with T-Mobile and Sprint close behind

given their multi-tiered product offerings. MetroPCS is T-Mobile’s pre-paid business while Boost Mobile is Sprint’s – both helping to

drive new customers for the parent brands. Verizon and AT&T are more popular with the older, more affluent crowd. Millennials are

more likely to embrace T-Mobile as well as some pre-paid carriers, such as Boost Mobile.

Lower income Americans are more likely to have a pre-paid wireless service plan on carriers such as MetroPCS, Boost Mobile and

Cricket. As can be expected, those with higher incomes subscribe to the more expensive premium carriers, Verizon and AT&T.

Verizon Wireless

AT&T

T-Mobile

MetroPCS

Sprint

Boost Mobile

Cricket Wireless

Virgin Mobile

Other

Verizon Wireless

AT&T

T-Mobile

MetroPCS

Sprint

Boost Mobile

Cricket Wireless

Virgin Mobile

Other

Total US

Millennials (18-34)

Non-Millennials (35+)

Income Under 50K

Income Over 50K

19%25%

22%

11%

11%

8%

7%

4%

1%

11%

16%

11%

18%

8%

9%

5%

1%

13%

30%20%

17%

16%

15%

10%

10%

5%

0%

9%

26%

24%

10%

11%

7%

6%

4%

1%

11%

28%

12%

6%

7%

5%

3%

1%

9%

State of the Telecom Market


Which of the following wireless carriers would you classify as premium or top tier?

Based on everything you know, which of the following wireless carriers do you think have great network coverage?

Verizon and AT&T are spending a lot of advertising dollars to

convince consumers that they are the best in the business.

For the most part, this strategy has been successful. Verizon

Wireless and AT&T are the top two brands regarded as

“premium” and “top tier”, followed by Sprint and T-Mobile.

Despite losing consumers for the first time last quarter, Verizon

is still king in terms of quality perception among both, current

customers and non-customers.

However, swaying consumer perceptions can be challenging.

There is a strong incentive for subscribers to rationalize their

wireless carrier choice. When asked which wireless brand they

associate with premium service, great network or affordable

plans, subscribers for each brand tend to select their current

carrier in overwhelming numbers. Even so, T-Mobile and Sprint

customers are less likely to classify their carriers as “premium”

relative to Verizon and AT&T customers.

Verizon subscribers are extremely positive about Verizon’s network coverage, more than subscribers of any other brand are about

their own service.

Verizon Wireless

AT&T

Sprint

T-Mobile

MetroPCS

Boost Mobile

Cricket Wireless

Virgin Mobile

None of the above

93%

38%

24%

13%

5%

4%

3%

2%

5%

49%

80%

28%

21%

5%

7%

4%

4%

14%

45%

35%

24%

67%

8%

7%

4%

4%

18%

54%

45%

29%

25%

14%

11%

7%

5%

15%

Total US Verizon Subscribers

AT&T Subscribers

T-Mobile Subscribers

Sprint Subscribers

43%

37%

73%

19%

4%

5%

2%

2%

17%

Verizon Wireless

AT&T

Sprint

T-Mobile

MetroPCS

Boost Mobile

Cricket Wireless

Virgin Mobile

None of the above

92%

29%

15%

9%

1%

2%

3%

2%

5%

38%

84%

20%

18%

5%

2%

1%

2%

9%

45%

32%

20%

69%

5%

4%

3%

2%

4%

50%

41%

23%

22%

12%

9%

6%

4%

10%


AT&T Subscribers


Sprint Subscribers

40%

24%

65%

10%

6%

3%

3%

3%

10%

indicates top choice for each comparison grouop


Based on everything you know, which of the following wireless carriers do you associate with having a high-speed network?

Based on everything you know, which of the following wireless carriers do you associate with having affordable plans?

Verizon and AT&T subscribers also have the most positive perception of their provider’s high speed network. While consumers

naturally tend to favor their current network the most, customers of AT&T, T-Mobile, and Sprint are all more likely to associate

Verizon with having a high-speed network.

Even when asked about plan affordability, subscribers tend to favor their own carrier. Perceptions of affordability among non-

subscribers are fairly low for Verizon and AT&T and are higher for T-Mobile and Sprint. MetroPCS is also seen as a very affordable

option overall.

Verizon Wireless

AT&T

T-Mobile

Sprint

MetroPCS

Boost Mobile

Cricket Wireless

Virgin Mobile

None of the above

85%

27%

6%

11%

1%

1%

2%

1%

9%

36%

83%

14%

19%

4%

2%

2%

1%

10%

38%

35%

74%

21%

3%

2%

2%

2%

7%

48%

42%

21%

21%

11%

6%

5%

3%

12%


AT&T Subscribers


Sprint Subscribers

31%

28%

13%

63%

2%

2%

3%

4%

14%

Verizon Wireless

MetroPCS

T-Mobile

AT&T

Sprint

Cricket Wireless

Boost Mobile

Virgin Mobile

None of the above

58%

12%

20%

13%

19%

16%

8%

5%

19%

16%

15%

19%

57%

20%

14%

11%

5%

17%

16%

21%

69%

17%

14%

15%

17%

7%

9%

25%

23%

23%

22%

19%

18%

17%

7%

16%


AT&T Subscribers


Sprint Subscribers

7%

17%

10%

9%

61%

18%

14%

8%

13%



Based on everything you know, which of the following wireless carriers do you associate with having great customer service?

While Verizon and T-Mobile customers are equally happy with their own customer support, Verizon is more likely to be viewed as

having strong customer service by non-customers. On the other hand, customer support is a pain point for AT&T and Sprint.

Verizon Wireless

AT&T

T-Mobile

Sprint

MetroPCS

Boost Mobile

Cricket Wireless

Virgin Mobile

None of the above

74%

13%

8%

9%

3%

1%

2%

1%

21%

22%

68%

15%

14%

5%

3%

3%

1%

21%

20%

18%

76%

12%

6%

6%

7%

8%

14%

33%

28%

21%

16%

12%

9%

7%

4%

20%


AT&T Subscribers


Sprint Subscribers

14%

12%

5%

65%

2%

7%

4%

3%

20%



What are the main reasons you decided to go with your current wireless service provider?

How important are the following when choosing a wireless service provider? (Extremely/Very important)

When asked why they chose the provider they have now, consumers mention unlimited data plans and low plan rates as the top

reasons, followed by better network coverage. Having a good network is important, but unlimited data deals and low plan rates can

help lock in new subscribers.

What Do Wireless Consumers Care About?Understanding one’s audience is more important than ever now, when there are few new consumers signing up for wireless plans

and telecom brands can increase their market share by stealing subscribers from their competitors.

When considering a new wireless service provider, consumers are now mostly concerned with network coverage, the speed of the

network, and availability of unlimited data plans.

Brands should also consider that when consumers are thinking of switching wireless plans, they are not always buying another

phone at the same time. Since certain networks (such as Verizon) require compatible phones, more than three-quarters (76%) of

Americans say that wireless service compatibility with their current cell phone is extremely/very important.

Unlimited data plan

Lower plan rates

Better network coverage

Joined a family plan

Good deal on a smartphone

Better customer service

Faster browsing and downloading speed

Carrier offered the smartphone I wanted

Carrier compatible with my smartphone

Overseas coverage at no additional charge

Other

Network coverage

Unlimited Data

Availability of the

smartphone you want

Device Financing Options

Overseas Coverage

High-speed network

Compatibility with your

current cell phone

83% 79% 76% 75%66% 60%

39%

33%

28%

28%

23%

22%

19%

17%

11%

11%

6%

19%


How important are the following when choosing a wireless service provider? (Extremely/Very important)

Millennial AudiencesTo reach the coveted millennial segment, it is imperative

for telecom brands to consider the singular behaviors and

preferences of this audience. Millennials want features and

services that are more in line with their lifestyle preferences,

which include constant use of smartphones, streaming video on

mobile, and a desire to travel overseas.

A high speed network is more important to millennials, as they

are more likely to stream video content on their mobile devices

(49% vs 31% for older generations1). Younger consumers are

also more particular about the smartphone they want; 73% say

that it is extremely/very important for the wireless carrier to

have their smartphone of choice available. Since millennials on

average have lower incomes, device financing options are more

important to them as well.

While free overseas coverage is the least important feature on

everyone’s list, it is significantly more important for millennials.

According to a recent study by Internet Marketing Inc, 75%

of millennials say that they want to travel abroad as much as

possible, compared to 52% for older generations2. Providing

free overseas coverage is a differentiating factor that may help

lure in this younger audience.

1 Fluent Streaming Services study 20172 Internet Marketing Inc (http://www.internetmarketinginc.com/blog/millennial-travel-trends/)

Network coverage

High-speed network

Compatibility with your current cell phone

Unlimited Data

Availability of the smartphone you want

Device Financing Options

Overseas Coverage

Millennials (18-34)


87%

86%

77%

73%

73%

66%

52%

83%

78%

76%

75%

65%

59%

36%

http://www.internetmarketinginc.com/blog/millennial-travel-trends/


What are the main reasons you decided to go with your current wireless service provider?

While having an unlimited data plan and lower plan rates were the top reasons cited by millennials for choosing their current

carrier, better network coverage was more frequently cited by older generations. It makes sense then, that millennials are more

likely to have a pre-paid plan or be on T-Mobile, but older consumers are more likely to subscribe to Verizon and AT&T.

Unlimited data plan

Lower plan rates


Joined a family plan




Carrier offered the smartphone I wanted

Carrier compatible with my smartphone


Other

Which is most important to you when you are choosing a wireless service plan?

While there are some users who are mainly concerned with talking minutes or data, most (72%) find both equally important. There

is a shift when it comes to younger consumers though, many of whom are more likely to prioritize either data or talk and texting

capabilities when choosing their plans.

Both are equally important

Amount of data Talk and text

Millennials (18-34)


41%

34%

20%

22%

25%

16%

17%

11%

8%

7%

18%

72%

14% 14%

31%

27%

29%

24%

21%

19%

17%

11%

11%

5%

19%

62%

21% 17%

75%

12% 13%

Total US

Millennials (18-34)



22%

Are you planning to purchase another mobile phone in the next 6 months?(% Yes)

What kind of a mobile phone are you planning to purchase? Among those who are planning to purchase a new phone in 6 months

Are you planning to switch wireless service providers in the next 6 months?(% Yes)

Since smartphones are integral parts of millennials’ lives, despite having lower incomes, they care more about their phones than

older generations. Millennials are more likely to purchase a new phone in the next 6 months and have a stronger preference for the

iPhone.

Most importantly, millennials are less loyal to their wireless carriers. While the level of satisfaction with their current carrier is the

same for all age groups, millennials report a higher desire to switch their wireless service provider in the next 6 months (18% vs

12%).

Millennials (18-34)


18%

35%

12%

55%

36%

25%

27%

10%

17%

1%

3%

10%

17%

iPhone

Samsung

Other Android smartphone

Other smartphone (Windows, Amazon)

Don't know

Millennials (18-34)


Millennials (18-34)



What type of a cell phone plan do you currently have?

Why did you decide to go with a prepaid wireless service plan?

Understanding the Pre-paid ConsumerPre-paid plans have been gaining popularity, as more and more providers and resellers are entering the space and the stigma of

the pre-paid plans is lessening, especially among the millennial population.3 Currently, 18% of Americans say they have a pre-paid

plan and this propensity is higher among millennials (23%).

Low price is by far the main reason consumers decide to go with a pre-paid plan. For millennial consumers, flexibility is also a

major selling point.

3 PrepaidPress (http://www.prepaidpress.com/features/wireless-industry-continues-to-evolve.html)

Total US

Millennials (18-34)


Cheapest plan available

Good network coverage

I could get the phone I

wanted

I don’t use a lot of data

Flexibility I could transfer my phone number

No minutes/data wasted

Other

Family plan

Individual plan

Prepaid individual plan

Prepaid family plan51%

45%

52%

31%

32%

31%

13%

18%

11%

6%

5%

6%

Total US

Millennials (18-34)


17% 16% 15%13%

18%21%

29%

41%

17%20%

14%16%

11%

23%

44%

53%

17%14% 15%

12%

20%20%24%

37%

http://www.prepaidpress.com/features/wireless-industry-continues-to-evolve.html


What incentives could get you to switch your wireless provider?

Are you planning to switch wireless service providers in the next 6 months?(% Yes)

Reasons for Switching CarriersConsumers may be swayed to switch by different offers, largely

depending on their current wireless carrier. Telecom brands

should take this opportunity to understand and capitalize on

any features/services consumers’ current plans may be missing.

For example, AT&T is one of the more expensive carriers in the

marketplace and only very recently started offering unlimited

data plans to all of its customers. Therefore, it is no surprise that

50% of AT&T customers say they may be convinced to switch

with lower plan rates and another 42% with unlimited data plan

options.

On the other hand, consumers who are on pre-paid low cost

carriers such as Boost Mobile and Cricket wireless are very

sensitive to the availability of better smartphones and getting a

good deal on a handset.

Customers of certain wireless service providers are keener to switch than others. Specifically, T-Mobile customers, as well as

customers of the largest pre-paid brands (especially Boost Mobile) are the least loyal and therefore make the best prospects for

conquest marketing campaigns.

AT&T

Sprint

T-Mobile

Verizon Wireless

Boost Mobile

Cricket Wireless

MetroPCS

Incentives that are most likely to get consumers to switch Moderately likely to get consumers to switch Least likely to get consumers to switch

10%

12%

18%

12%

27%

15%

15%

Lower plan rates

Unlimited data plan




Better phones available



Nothing

SprintAT&T T-Mobile Verizon Wireless

Boost Mobile

Cricket Wireless MetroPCS

40%

37%

28%

26%

30%

23%

19%

12%

28%

50%

44%

33%

34%

32%

40%

23%

15%

24%

37%

33%

31%

34%

26%

20%

14%

11%

36%

29%

35%

33%

37%

42%

30%

20%

16%

23%

41%

34%

23%

21%

22%

20%

16%

11%

42%

42%

32%

22%

28%

23%

20%

13%

6%

41%

50%

42%

29%

27%

27%

21%

18%

15%

33%


How satisfied are you with your current wireless service provider?

Interestingly, satisfaction with one’s wireless service provider is not necessarily correlated with a desire to switch. Instead, it is an indication that consumers are more loyal to certain brands. For example, while T-Mobile and Boost Mobile have some of the highest rates of customer satisfaction, they also have the highest number of customers who are planning to switch. On the other hand, Sprint customers are more loyal to their brand. While 16% of Sprint customers report being dissatisfied with their wireless carrier – higher than most other brands – only 12% are planning to switch in the next 6 months.

What incentives could get you to stay with your current provider? Among those planning to switch in the next 6 months

Customer RetentionIn a crowded marketplace, retaining current customers is as important for telecom brands as adding new ones. While certain features (such as network coverage) largely depend on outside factors such as spectrum auctions, there might be an opportunity to appease consumers by offering them features and services that are easier to control.

Among consumers who said they are planning to switch wireless carriers in the next 6 months, features that can convince them to stay vary by provider.

Lower plan rates are top of mind for many, especially those currently on Verizon, T-Mobile and Sprint. On the other hand, 76% of Cricket Wireless customers and 43% of T-Mobile customers could be persuaded to stay by being offered a good deal on a new smartphone.

Better customer service, while never on the top of the list, can incentivize at least 20% of consumers to stay with their current carrier.

Incentives that are most likely to get consumers to switch Moderately likely to get consumers to switch Least likely to get consumers to switch

Lower plan rates

Unlimited data plan




Better phones available


Overseas coverage at no additional

Nothing

17%

31%

41%

44%

29%

40%

21%

23%

13%

43%

45%

36%

34%

46%

32%

19%

31%

11%

61%

61%

41%

43%

37%

42%

19%

27%

20%

43%

66%

49%

76%

70%

62%

34%

13%

0%

68%

48%

42%

30%

39%

23%

20%

15%

2%

55%

56%

41%

42%

52%

24%

23%

19%

9%

47%

53%

40%

39%

29%

21%

26%

8%

10%

SprintAT&T T-Mobile Verizon Wireless

Boost Mobile

Cricket Wireless MetroPCS

Satisfied (very/somewhat)

Neither satisfied nor dissatisfied

Dissatisfied (very/somewhat)

70%

14%

16%

Sprint

81%

10%

10%

AT&T

81%

9%

10%

T-Mobile

87%

7%

6%

Verizon Wireless

81%

8%

10%

Boost Mobile

73%

8%

18%

Cricket Wireless

76%

12%

11%

MetroPCS


MethodologyFluent’s “Telecom Survey” was conducted online within the United States by Fluent, LLC on May 7, 2017

among 1,611 US consumers (aged 18 and up). Due to rounding, percentages may not always add up to

100%. Fluent’s proprietary ad serving technology includes a real-time survey module that was used to

facilitate the data collection for this study. Respondents were randomly selected and data was weighted to

US Census 2010 population distribution.

https://factfinder.census.gov/faces/nav/jsf/pages/index.xhtml

ABOUT FLUENTFluent, LLC, a cogint company (Nasdaq: COGT), is an industry leader in people-based digital marketing and customer acquisition, serving over 500 leading consumer brands and direct marketers. Leveraging a massive reservoir of proprietary audience data, as well as millions of real-time survey interactions with consumers every day, Fluent enables advertisers to more effectively target and acquire their most valuable customers, with precision, at a massive scale. The company is headquartered in New York City. For more information visit www.fluentco.com.

fluentco.com I [email protected] I 646.647.2966

https://factfinder.census.gov/faces/nav/jsf/pages/index.xhtml

http://www.fluentco.com

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