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M:Metrics finds operator store customers spend more on mobile services
Posted: 20-Nov-2006 [Source: M:Metrics]

[New research from M:Metrics finds customers who shop in operator stores spend more on monthly services than phone shoppers at indirect retailers.]

Seattle, WA and London -- M:Metrics, the mobile market authority, reports a direct correlation between the venue of handset purchase and subscribers' monthly spend on mobile services. The firm found that the majority -- 56 percent -- of users who bought their handset at an operator store pay more than $60 per month for mobile service. In contrast, consumers who spent less than $60 on monthly mobile services were more likely to have purchased their phones through indirect retailers such as Wal-Mart, Best Buy, Radio Shack or Circuit City.

ADVERTISEMENT According to John Jackson, vice president and senior analyst, M:Metrics, the latest numbers support the operators' continued investment in the direct channel as a value driver because of its inherently higher-touch environment than 'grab-'n'-go prepaid' or big box environments.

"The operator direct channel is a cost driver, but the return on that investment is evident here," said Jackson. "The indirect channel has yet to raise the bar in terms of aggregate voice and data ARPU."

However, Jackson says as prepaid and family plans will characterize much of the remaining addressable upside in the US market, indirect and online channels are key to addressing the demand of these consumers.

"The carriers are leaving data ARPU on the table as discount retailers like Wal-Mart dedicate more real estate to mobile products and consumers flock to the Internet to find the most inexpensive handsets and cheapest plans," said Jackson.

European operators are also expanding control of the retail channel. The latest high-profile move saw Vodafone drop Carphone Warehouse, one of the largest European phone retailers, from selling contract subscriptions in the UK.

"This is part of a larger move of the operators taking greater control of the retail channel with many acquisitions of independent retailers," commented Paul Goode, vice president and senior analyst, M:Metrics, from the firm's European headquarters in London. "Our data supports this strategy, especially with the need for greater consultative and informed selling to drive consumer awareness and usage of mobile data services."

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