Mobile experience helps explain why Italians are churning from the big brands

Opensignal has analyzed mobile subscriber churn in Italy and found that our users who changed their mobile operator on average had a worse mobile experience before they switched compared to the typical experience on their original network. Also, our data shows that, while the main brands of TIM, Vodafone and WindTre are losing smartphone users, their respective lower-cost brands — Kena Mobile, ho. and Very Mobile — are gaining users.

Churn is important for Italy’s mobile operators because the market is no longer growing and so to acquire new customers they must persuade users to leave their existing operator. In fact, the total number of active SIMs in Italy excluding machine-to-machine devices (M2M) has been steadily declining for years. The telecom regulator, AGCOM, reported that at the end of June 2020 Italy had 78.1 millions SIMs, excluding M2M, down from 94.1 millions SIMs at the end of December 2012. AGCOM also reports a steady amount of Mobile Number Portability (MNP) operations — an average of 3.4 millions operations per quarter in the last five years, confirming that churn is a lively dynamic in the market. 

Opensignal analyzed our Android smartphone users in Italy who changed their mobile network service provider (‘Leavers’) between the start of the year and the end of September 2020. We calculated the proportion of Leavers that each mobile operator lost and gained out of the total number of Leavers. Then, for each mobile operator, we calculated the difference between those two percentages, to find the net flow of Leavers.

Our data shows that, by the end of September 2020, TIM, Vodafone and WindTre were all losing smartphone users on their main brands, while their respective low-cost brands — Kena Mobile, ho. and Very Mobile — were gaining users. Moreover, in recent months we observed an increasing number of users who moved towards low-cost brands, including Iliad, Poste Mobile and other MVNOs, suggesting that the current economic challenges caused by the COVID-19 pandemic are raising mobile subscribers’ price awareness.

Opensignal then analyzed the mobile experience of our Leavers during the third quarter of 2020. We looked at those users’ mobile experience during the 30 days before they made the change, and compared that against the average experience on their network during the third quarter.

We found that Leavers on average had a worse mobile experience before they switched than the typical experience observed by our users on their original network provider. Leavers across all four national MNOs on average spent between 64% and 94% more time without a mobile signal compared to the average scores on their networks; they also spent less time connected to either a 3G or 4G mobile connection — 3G/4G Availability — and they experienced a lower 4G Availability. Our data therefore suggests that users experiencing mobile networks' pain points are more likely to change their mobile service provider.

Operators should address users with weak mobile network experience to reduce churn

Iliad’s entrance in the Italian mobile market as a low-cost mobile service provider prompted the incumbent operators to invest in low-cost brands in recent years. The combination of new brands launching and renewed efforts around existing brands has increased the number of attractive low-cost mobile offers available to Italian customers. But Opensignal’s analysis of Italian smartphone users shows that price alone does not explain churn — even in a market like Italy with many low-cost brands — and that mobile network experience is extremely important to understand churn.