Customer loyalty lies with the operating system

Once upon a time, a typical Telenor customer stayed loyal to his trusty Nokia mobile phone. He liked it, found it easy to use and was comforted by its familiarity. When models such as Nokia’s N73 hit the retail shelves, loyalty rates soared to an unprecedented 70 percent. Fast forward to 2011 and the mobile operator is in the midst of a new reality, a reality in which customer loyalty belongs to the operating systems, not the manufacturer.

Investigating mobile operating system trends

To dig a bit deeper in this new operating system-driven reality, Telenor Group used its own Handset Analysis Tool (HAT), a Web-based tool that is stocked full of device data from each of Telenor’s operations, to look into the trends related to the non-proprietary mobile operating systems. The output of this research is used as input to the company’s strategy, helping Telenor determine the best mix of devices for its networks, as this has an impact on revenue, traffic, ARPU and more.

“Today we are seeing a growing loyalty to the operating systems (OS), such as Android or iOS (iPhone), while fewer people care about the brand of their handset, whether it’s HTC or Samsung for instance. However, customers may not be fully aware that it’s the OS to which they are loyal, they just know that they like the experience, the applications and the user interface on a particular handset, and they stick with it,” said Per-Olof Johnsson, Director of Device Projects, Telenor Group.

iPhone users are most loyal according to a recent study

Telenor is not the only one with growing awareness of the importance of the operating system. According to a recent study conducted by German market research company, GfK, approximately 59 percent of iPhone users responded that they plan to remain loyal to the iPhone. GfK found that Apple’s iOS, above all others, garners the most customer loyalty today.

According to Telenor’s HAT, GfK is not alone in witnessing this iPhone loyalty, as iPhone is a strong player in Telenor’s Nordic markets. However, this same tool also shows that Android is especially popular among Nordic youth, showing this operating system to be a strong contender against iPhone dominance.Â

“Finding vendor harmony is a constant challenge, especially from a sourcing perspective. It is important for us to maintain a balance in our device portfolio across our business units. Through our HAT analysis we can see which operating systems are generating the most traffic or revenue, for example, and this information can help us make strategic decisions when it comes to price plans for subsidies,” explained Per-Olof.

HAT helps business units make device decisions

Telenor’s Irfan Khan heads up the Devices Program which is responsible for making key device decisions across the Group. He sees HAT as an important tool is helping the business units make strategic decisions on new campaigns and price plans, for example.

“Telenor would like to offer customers the freedom to choose from a wide range of devices, which is why it is important for us to have close collaboration with all of the key players in device eco-system. Because of this priority, the Telenor Device Program works on a number of strategic and market collaboration projects with the major players in our various markets,” said Irfan Khan, Vice President and Head of Devices for Telenor Corporate Development, Markets. “We are excited that HAT is now available in all our markets. It serves as a strategic tool for our business units, allowing them to use this customer insight to plan campaigns and offer product and services.”