UK mobile loyalty programmes: room for improvement

Executive summary

• In a nutshell
• Key messages
• Ovum view
• Recommendations

UK mobile market conditions promote churn

• Fierce competition and slowing growth
• Lack of differentiation between mobile offerings
• UK MNOs need to start putting existing subscribers first

UK MNOs - three loyalty issues

• Handset subsidies reward “bad” behaviour
• Better to be a new customer than a loyal one
• Loyalty programmes are poorly communicated

Loyalty programmes

Useful tools for MNOs

Telefónica O2 UK

• Early mover with simple programmes
• O2 treats - a monthly sweet
• Other O2 loyalty initiatives

Orange

• Lots of quantity but quality is not the same
• Pay as you go (PAYG) Animal Packages
• Best plan proposition
• Other Orange loyalty programmes

Vodafone

• Targeting high-value prepaid subscribers and friends

T-Mobile

• Focused on giving credit back

3

• Lagging behind

• Figure 1. UK mobile connections: 2007-12
• Figure 2. UK MNOs subscriber base versus net additions in 2007
• Figure 3. Fully subsidised handsets offered by UK MNOs in May 2008
• Table 1. Orange' s PAYG Animal Package with rewards
• Table 2. Speak Easy rewards
• Table 3. PAYG handset upgrade rewards