ADSL customer churn figures on the rise

ISPs are capitalising on the growing amounts of customers opting to churn away from their existing ADSL providers, attaching free transfer offers and value-added features to their plans in a bid to entice customers to their network.

The introduction of Telstra Wholesale’s one-step ADSL transfer process 12 months ago has seen customer churn figures rise significantly, ISPs report.

Netspace claims around 20 per cent of total customers joining the ISP are churning away from another provider. Netspace managing director Stuart Marburg said this figure is definitely on the rise.

“People are definitely starting to take advantage of the one-step ADSL transfer system. In fact, that is how the majority of churn customers join Netspace,” he said.

Marburg suggested the main reasons why people choose to find another ISP are price and monthly data allocations.

“Other factors such as additional services such as games servers or PIPE [peering] can also influence people to churn if they are seeking an ISP that offers such features,” he said.

“If people can get a better deal, and they are comfortable with churning, then they will seriously consider it.”

Another issue that may cause people to churn away from their current ISP is network performance, Marburg said.

Netspace’s primary strategy for preventing customer churn is to focus on delivering a reliable and stable network, as well as provide additional features, such as free traffic sites, to compel customers to stay onboard, he said.

However, there is a certain segment of the market that will churn on a regular basis as they search for the sake of finding the best possible deal at any given time, Marburg said.

“It is very difficult to keep individuals such as these as long-term customers as they are not loyal and will search for the best possible plan.”

According to ISP WestNet, more than 10 per cent of its new customers are existing broadband users churning from another ISP.

“Since the introduction of the ADSL Transfer process around 12 months ago, the market for transferring ADSL connections has increased dramatically,” managing director Peter Brown said. “As a result we are seeing real growth from existing broadband customers switching to WestNet”.

Brown said the churn market consists of a mixture of maturing ADSL contracts and disappointed users who have revaluated their services and seek a better fit for their needs.

“We are relying on quality customer service and competitiveness of our offerings to attract new members to our network,” Brown said.

With the aim of capitalising on the ADSL customer churn market, Perth-based ISP WestNet is offering customers from its competitors the opportunity to transfer to their broadband services for free. The WestNet free transfer offer is available until 30 June.

Netspace also offers a free transfer process to new customers churning to its plans, with the exception of its Starter 256 plan, where transfer fees range from $59 (on a 6-month contract) to $39 (on a 12 month contract).

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Nadia Cameron

Nadia Cameron

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