Family plans historically were important because they drove mobile services in the “teenager” market, the last remaining untapped demographic once adult adoption had nearly saturated. These days, family plans are a major contributor to retention.
On average, 46 percent of subscribers are on family plans in 2011 and in the 2010 survey compared with 48 percent in 2009, according to a new survey conducted by PwC.
While family plans can be a slight drag on average revenue per user, they are an effective means of deterring churn since they require the conversion of an entire set of devices and customers in order to effect a change.
“We also believe that family plans may also yield significant secondary benefits, particularly in terms of lower rates of bad debt and reduced per-user customer care costs,” PwC says in its report.
So far, fewer than 30 percent of responding companies include the use of wireless cards, wireless data dongles, or embedded devices such as tablets as part of postpaid family plans, but PwC thinks that will change.
As carriers begin to offer more incentives for multi-device data plans that resemble the existing voice and messaging buckets of service, PwC expects the percentage of users on family plans to increase in 2012.
About 44 percent of the survey respondents said average revenue per family plan subscriber ranged from $51 to $60. In the 2010 survey, 50 percent of respondents cited an average revenue range from $51 to $60 for family plan accounts.
That suggests overall family plan revenue is declining. But it is possible, perhaps even likely, that family data plans will reverse the trend, even as more “lighter users” are added to such family plans.
In general, family plans still appear to be an effective way to increase the length of subscriber relationships and reduce churn, as churn continues to trend down for family plan customers.
The PwC survey results reflect the participation of eight US companies, including three of the four largest wireless operators by revenue and subscriber base, as well as four major Canadian wireless companies, including the three largest.