Cell-phone Loyalty in LatAm: Potential for Large Disruption, Given the Right Offer

Nuremberg, Germany (ots/PRNewswire) -

Across Latin American countries, only 20 percent or less of cell
phone users have switched their service provider in the last 12
months. But when presented with various scenarios of improved offers,
the percentage of people who say they would switch rockets to between
35 and 59 percent.

These are some of the findings from a recent GfK online survey of
around 4,900 cell phone users covering Argentina, Brazil, Chile,
Colombia, Mexico and Peru.

In the last 12 months, just 20 percent of cell phone users in
Columbia have changed their provider, followed by 19 percent in
Brazil and Mexico, 17 percent in Chile and Peru, and just nine
percent in Argentina. But when GfK presented the respondents with a
number of scenarios of different improved packages, it found that the
percentage of 'loyal' users, who would not switch in any of the
presented scenarios, is low (5 to 16 percent) - while the percentage
of 'mercenaries', who would switch in any of the scenarios presented,
ranged from a third to over half.

Peru has the highest percentage of 'mercenaries', standing at 59
percent, followed by Colombia (53 percent), Brazil (52 percent) and
Mexico (50 percent). Even Chile (37 percent) and Argentina (35
percent) have well over a third of cell phone users saying they would
switch provider in any one of the package scenarios presented.

Looking at the completely loyal users, who say they would not
switch in any of the package scenarios given, Chile comes out top, at
16 percent, followed by Argentina at 10 percent, then Brazil and
Colombia at five percent each, Peru at four percent and finally
Mexico at just three percent.

It is also worth noting that 'number portability' - the ability to
take one's cell phone number with one when switching provider - has
only recently been introduced in Latin America. The expectation is
that this will also increase churn, having removed one of the major
barriers to switching.

Argentina Brazil Chile Colombia Mexico Peru

Have 9% 19% 17% 20% 19% 17%
switched in
last 12
months

Mercenaries: 35% 52% 37% 53% 50% 59%
would switch
in any of
the scenarios
presented

Loyal: would 10% 5% 16% 5% 3% 4%
not switch
in any of
the scenarios
presented

Sample: smart phone users in Ar, Br, Co, Mx and Pe; total market in Cl

The study showed that the top two most attractive packages for
consumers were: their current plan at a better price with a phone
included for free, or a better plan at the same price, again with a
phone included for free. Brazil alone stood out in voting the most
attractive package as being their current plan at a lower price with
the latest-technology phone included at a very low price.

Frans Janssen, chief operations officer for GfK's Consumer Choices
research in Latin America, comments, "Currently switching between
cell phone providers is low across the LatAm region, giving the
impression that loyalty (or inertia) is high. But this is not the
case. Our findings show there is potential for high levels of churn,
given the right offer. To retain their existing users and win users
from competitors, service providers need to offer packages that
maximize profit for the user. The first providers who go in with
improved offers - backed by good quality service - are likely to make
significant gains."

About the study

GfK interviewed a total of 4,911 people aged between 14 to 65
years old via online surveys conducted in Argentina, Brazil, Chile,
Colombia, Mexico and Peru. Fieldwork was carried out in July 2015 and
the data weighted according to sample distribution of age, gender and
region.

For more information, please visit http://www.gfk.com or follow
GfK on Twitter: https://twitter.com/GfK

For the full study findings and insights - including results for
individual providers - please contact: Frans Janssen, tel.
+56-223-386-600 or Frans.Janssen@gfk.com .

ots Originaltext: GfK SE
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