Average Number of Weekly Calls Made by Pre-Pay and Contract Customers is Decreasing

LONDON: 3 May 2007 — Virgin ranks highest in customer satisfaction for its mobile telephone service in both the pre-pay and contract service sectors, according to the J.D. Power and Associates 2007 UK Mobile Telephone Customer Satisfaction Study released today.

The study, now in its 10th year, measures the customer satisfaction of pre-pay and contract customers with the UK’s leading mobile network providers. Overall satisfaction for pre-pay providers is measured based on performance in six factors: image; offerings and promotions; call quality/coverage; cost; handset; and customer service. Satisfaction in the contract segment includes the additional factor of billing.

Among pre-pay providers, Virgin moves from third place in 2006 to first place in 2007 with an overall index score of 724 points on a 1,000-point scale. Virgin performs well in all six factors. O2 (699 index points) follows Virgin in the rankings. Tesco Mobile, which is included in the study for the first time, ranks a close third with 696 index points.

Virgin also ranks highest in the contract sector, with an overall index score of 730 points. Virgin receives particularly high ratings in six of the seven factors in this segment: image; cost; offerings and promotions; customer service; billing; and handset. O2 (683) and T-Mobile (679) follow Virgin in the segment rankings.

The study also finds that nearly one-half of all mobile users (46%) received some form of incentive or reward from their network provider to encourage loyalty, with contract customers (51%) more likely to receive rewards than pre-pay customers (44%). The most frequent incentive/reward cited by pre-pay customers is “extra credit for spending a certain amount” (22%), while contract customers are most frequently offered handset upgrades (22%).

“With increasing numbers of consumers reporting their intention to switch providers, it’s becoming even more important for providers to reward existing customers for their loyalty,” said Caspar Tearle, director of service industries research at J.D. Power and Associates. “One-tenth of pre-pay customers and more than one-fifth (21%) of contract customers intend to change in the next 12 months. Our research also shows that rewarding mobile customers has a positive impact on levels of customer satisfaction and could entice potential customers to switch networks.”

The study also finds several key mobile phone usage patterns:

* The average number of weekly calls made by pre-pay customers has dropped from 14 in 2006 to 10 per week, and the average number of text messages has stayed the same at 27. Among contract customers, the number of calls made per week has dropped from 35 in 2006 to 27 in 2007, while text messages have increased considerably, from 32 to 46.

* More than two-thirds of mobile phones now have a camera feature (72%) and the ability to download games and ringtones (69%). Usage of these services has also increased, with 66 percent of users now taking photos and 47 percent sending photos to others. However, fewer than one-quarter of users (23%) actually download ringtones.

* Nearly one-half of all mobile users (47%) have upgraded their handsets in the past 12 months.

* Pre-pay customers pay an average of £12.35 per month, representing an annual spend of £150, with O2 customers spending the most (£13.95) and Virgin customers the least (£10.90). Contract customers spend £32.45 per month—Orange customers spending the most (£37) and Virgin customers spending the least (£26.50).

The 2007 UK Mobile Telephone Customer Satisfaction Study is based on 2,706 telephone interviews conducted between March and April 2007 with pre-pay and contract mobile phone customers.

Source: J.D. Power and Associates