Strategy Analytics: Churn Avoidance Drives Mobile Operator Content Strategies

Reducing churn and increasing subscriber engagement is at the heart
of most mobile operator content strategies, according to a new report
from Strategy
Analytics Wireless Media Strategies (WMS) service “Strong
Churn Benefits and Improved Profits Drive Mobile Operator Content
Strategies.” The objective of bundling access to premium
subscription video or music services into tariffs is to upsell
subscribers to higher priced tariffs with larger data allowances, drive
user engagement and data traffic, all with the aim of reducing churn.
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Mobile operators have fared poorly in mobile content, whether through
own branded content services or with their own app stores. Excluding pay
TV services offered by multiplay operators Strategy Analytics estimates
content contributes to single digit share of service provider revenue on
average, though churn avoidance remains a key benefit. Phil
Kendall, Director, Strategy Analytics, noted “Bundling popular
premium subscription content in to wireless plans is a popular strategy
for operators. Content bundling has potential to dramatically cut churn
by almost half , while the impact of reducing the churn rate by 1% leads
to 2.5% revenue growth over a 5 year period, assuming the operator
acquires subscribers at the same rate.”

Intense competition, stagnating service revenue, and 5G on the horizon
provide an opportunity for mobile operators to re-evaluate their
position in content distribution.

Patel, Director, Strategy Analytics, added, “The majority of
operators remain focused on monetizing data. However, both AT&T and
Verizon demonstrate leadership in content because of their position in
content distribution and content creation which enables them to take a
greater share of content revenue. Operators that want to be aggressive
with 5G consumer propositions need to use content to demonstrate the
value of 5G networks to users beyond an improvement in data speed.
Operators must address issues such as how to convince subscribers to
migrate from 4G to 5G, who they should partner, and impact of 5G on the
content distribution value-chain.”

About Strategy AnalyticsStrategy
Analytics, Inc. provides the competitive edge with advisory services,
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mobile and wireless, digital consumer and automotive electronics
companies. With offices in North America, Europe and Asia, Strategy
Analytics delivers insights for enterprise success.

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