T-Mobile's New Plan: Stopping Customers From Running Away

Flee Running

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.

First, bigger picture: Here's T-Mobile's growth plan to add $3 billion in additional revenue by 2014

So here's what T-Mobile has done so far to combat churn

Here's how T-Mobile says it's going to make its network faster using HSPA+ technology instead of LTE

This is the plan to increase data coverage, including improving in-home coverage with wi-fi calling

It's going to build out its network further, which will have an added benefit of reducing roaming costs

Here's how T-Mobile plans to take advantage of growing demand for smartphones

And here's an early look at its phone roadmap, including a 4G T-Mobile Sidekick running Android

T-Mobile shows how it's different than its rivals, including lower pricing on data

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