Report: AT&T most likely to pick up switching subscribers

ChangeWave's survey does not use demographics. Switchers to AT&T is more likely to be younger users joining their friends. Verizon's churn has been lower than AT&T for about three years, and has built a stronger customer base. Their lead in customer satisfaction is the proof. AT&T is paying for switchers with handset subsidies and a higher CCU (Cash Cost per User). Switchers take more ops expense in billing, collections, and service. Verizon wins with a stable high-margin customer base, and recently showed its confidence by downplaying prepaid.

I think this report is valid in today's environment. Like landline, wireless attributes will become understood, ie. I am now speaking thru the air and not a wire, so a dropped call is normal. This dynamic removes the luster from Verizon's superior "customer satisfaction". For the case of younger switchers, well they will become older wirelessly astute AT&T customers 10 plus years for now. AT&T has won and they are now more compelling. Verizon is bland and "my mother's wireless carrier". AT&T has figured out that you push as many phones possible as fast as possible. This will hurt their margin and raise OPEX, but the customers there are waiting for the next best thing to come from this company and it is better to be with them when it happens to get first dibs. Hence, their much improved churn year over year. Picture this: AT&T has lower churn with more gross adds than Verizon. Proof is AT&T declining post-paid churn over the past 6 quarters. Verizon has kept pace with AT&T because of lower churn, but AT&T has alway beat them on gross adds. Now with 2-year contracts CCU is becoming a moot point because they would see a return on service after 14 months and the last 10 would be gravy. If they have another compelling device (iPhone) waiting, theres another 10 month gravy train. Pay attention to AT&T 3rd quarter numbers. They will show this return on iPhone use after 14 months. It will only be significant depending on the performance of the new iPhone dropping in June. AT&T is doing a heck of a job setting them up and knocking them down. Looks pretty fluid.

Phil, nice article. The main thing I would mention to anyone considering switching cell phones plans, however, is that you should figure out first whether you can reduce your current cell bills down to acceptable levels--thereby saving often significant plan cancellation fees (AKA "early termination fees"), not to mention the convenience of keeping your present cell phone number. Importantly, there are still ways to effectively reduce your cell bill. Not to blatantly plug, but I work for the consumer advocacy website fixmycellbill.com, powered by a company called Validas, where we slash the average cell bill by 28 percent. It costs five bucks to implement our suggested changes to your plan (the average consumer currently saves around $450 annually through us) but we will analyze your bill for free without any commitment of purchase, just to let you know exactly how many dollars your carrier is ripping you off by. I could go on and on about how shifty these cell companies can be in their attempts to make you overpay. We stop them, and have currently saved consumers over $5,000,000 by auditing over 26,000 cell lines. You can check out Validas’s fixmycellbill.com in the national news media, most recently on Good Morning America at abcnews.go.com/GMA/MakeMoney/story?id=7640149&page=1.

Good luck to everyone reading on making an informed wireless choice.

Dylan