LEMAY-YATES ASSOCIATES INC. (LYA) is pleased to announce the publication of a new c-Ahead strategic research report entitled “A Primer on Metrics and Consumer Perspective on Mobile Service Contracts”. This 17-page Report provides results and analyses of online primary research conducted in January 2013 as well as in 2012 and in 2011 focusing on consumer perspective on mobile service contracts duration, cancellation fees and penalties paid in cases of early cancellation in exchange for handset discounts with long term contracts. The Report also provides valuable information on the proportion of consumers using long term contracts and how this evolved from 2011 to 2012.

The LYA report provides segmentation of the results along mobile service provider as well as along the type of handset used by mobile consumers in addition to socio-economic and geographic segmentation. Handset segmentation includes the key smartphone platforms (iPhone, Android, Blackberry) as well as LTE smartphones and feature phones. Segmentation along mobile service providers includes, in addition to the three incumbents and their flanker brans, Videotron, other new entrants (Wind, Mobilicity and Public Mobile) MTS and SaskTel, as well as other service providers (Primus, 7/11, PC Mobile Food for Talk, etc.).

Below are some of the key findings of the Report:

  • Canadians give thumbs down to 3 year contracts… more than 70% of mobile subscribers agree that mobile service contracts should be 2 years or less; Blackberry users agree with shorter term contract in the highest proportion while LTE smartphone users feel slightly less strongly about this point
  • At least half of mobile consumers subscribe to contracts of 2 years of more and 3-year contracts represent a very significant proportion; this restricts the number of mobile consumers that look to switch service provider each year.
  • LYA estimates that less than 50% of the subscribers on contract with the three main incumbents are actually eligible to renew their subscription or change service provider each year.
  • The proportion of subscribers with a three-year contract has increased significantly from 2011 to 2012 among the flanker brands of Rogers and Bell.
  • A large minority but still a minority of mobile consumers agree that they should expect to pay a penalty when they cancel a mobile service contract ahead of time when they have received a subsidy for their phones in exchange of a long term contract.
  • Among the three incumbent carriers, the subscribers to Rogers (incl FIDO and chatr) expressed the most agreement with a statement that said contract terms should not exceed 2 years while subscribers to TELUS (including Koodo) were slightly less inclined to do so.
  • Videotron subscribers agree in a higher proportion with the payment of penalties when cancelling a long term service contract ahead of time.
  • Younger customers (in the 18-34 range) expressed the highest level of complaint with cancellation fees and contract duration.
  • Mobile consumers in Ontario as well as in Saskatchewan and Manitoba expressed the highest level of agreement with the statement that contract terms should not exceed two years.
  • Detailed analyses are provided in the Report with 15 Figures providing overall summary as well as segmented results and year to year evolution in contract subscription rates.