Thursday, February 12, 2015

Just 25% of T-Mobile subscribers prefer the traditional two-year mobile contract model

New mobile research shows new handsets and no-contract options are helping to drive upgrades

Parks Associates mobile research finds just 25% of T-Mobile subscribers prefer the traditional mobile contract model of a two-year contract with a subsidized handset. The research firm’s Choice of Mobile Device: The Consumer Perspective finds T-Mobile subscribers have embraced the company’s new programs that do not require a service contract. Among T-Mobile subscribers planning to purchase a smartphone, 33% prefer to pay full price upfront, and 31% prefer to pay in monthly installments.

“T-Mobile and AT&T have also tapped into the consumer desire for the latest and greatest smartphone with their early-upgrade programs,” said Harry Wang, Director, Health & Mobile Product Research, Parks Associates. “Fourteen percent of smartphone owners plan to upgrade their phone more quickly the next time, and 27% of these consumers cite special operator incentives as the reason for their quicker upgrade.”

Preferred Purchase Model for Next Smartphone

These alternative plans, early upgrade and no-contract plans, are disrupting the market’s traditional purchase model for handsets. Parks Associates’ Q3 2014 consumer research of U.S. broadband households shows slightly more than 50% of U.S. consumers who are planning to purchase a smartphone in the next 12 months, regardless of brand, would prefer an alternative to the two-year contract model.

“Accelerated rollout of LTE services by operators worldwide, along with the launch of flagship smartphones like Apple’s iPhone 6 and Samsung’s Galaxy Note Edge in 2014, have transformed the mobile industry,” said Wang.

OEMs will showcase their top-tier smartphone models and smart watch products at the upcoming Mobile World Congress. Wang noted that operators must find effective ways to persuade smartphone users to upgrade early and purchase a bigger data pool while, at the same time, minimize voluntary customer churn.

“These alternative plans are one stone for two birds—they help operators acquire new subscribers and retain loyal, high-value customers,” Wang said. 

Choice of Mobile Device: The Consumer Perspective analyzes the impact of new handset purchasing models on the market for mobile phones. For more information on Parks Associates’ mobile research, visit www.parksassociates.com or call 972-490-1113. To schedule an interview with Harry Wang or request mobile data, contact Holly Sprague at hsprague@gmail.com, 720.987.6614. 

About Parks Associates: Parks Associates, a woman-owned and woman-led internationally recognized market research and consulting company, specializes in emerging technology solutions serving the consumer and small to medium business (SMB) markets. Celebrating its 35th year in 2021, Parks Associates is a partner to companies navigating the changing consumer technology landscapes through data-driven market insights, extensive consumer and industry intelligence, custom marketing services, and executive networking experiences and conferences.

The company's expertise includes home automation, control systems and security, digital media and platforms, entertainment and gaming, home networks, internet and video services, connected health and independent living solutions, mobile applications and services, support services, consumer electronics, and energy management solutions.

Each year, Parks Associates hosts industry webcasts, the CONNECTIONS™ Conference Series, Connected Health Summit, Smart Energy Summit: Engaging the Consumer, and Future of Video: OTT, Pay TV, and Digital Media. http://www.parksassociates.com

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