T-Mobile USA, the no. 4 U.S. wireless provider, has a problem with customer retention.
Solving it is one of the carrier’s big challenges for the next few years, executives said at a media breakfast this morning.
Each month, more than 2% of T-Mobile’s subscribers who were on long-term contracts leave the service. That’s about 25% “churn” per year. And it’s about twice the churn rate of T-Mobile’s larger rivals, AT&T and Verizon Wireless.
So if T-Mobile is going to become more successful and more profitable, it’s going to have to tackle its churn problem. Executives were very forthcoming about this.
So what’s T-Mobile’s plan?
It has changed leadership and started to tie compensation to churn. It is using more help from its parent company, Deutsche Telekom. It has a plan to deal with the fact that it doesn’t have the iPhone. (Android, basically.)
The goal is to get close to 2% churn in 2011 and less than 1.8% in 2012.