This blog will explore the current state of customer loyalty in the telecommunications industry and innovative strategies that forward-looking companies can implement to retain customers.
The telecommunications industry is going through a major digital transformation. Unsurprisingly, startups and established businesses are responding to these opportunities.
The result is that customer loyalty is now more a result of a great customer experience than of price alone.
Pricing continues to lose its ability to retain customers as competition increases, creating a void that businesses must fill to thrive in a heavily saturated market.
With the telecommunications industry heavily saturated and services commoditised, providers are subject to high churn rates, among other issues. Here are some challenges facing the industry today.
Telcos must prioritise their customer retention efforts, as customer churn in telecommunications can reach up to 31%.
One of the main factors behind this churn rate is the lack of product differentiation. This calls for innovative product (or service) and loyalty strategies to retain customers since acquisition costs are typically higher than retention costs.
According to a 2019 TechSee survey, 44% of telecom customers actively sought a new provider, while the rest churned passively. They did this either because they were unhappy with the service or because they got a better offer from a competitor.
The report also suggests that the bulk of reactive retention strategies fail. 61% of companies were unsuccessful at trying to retain their customers (typically via discounts or apologies) after contract cancellations.
Meanwhile, 40% of those who switched providers after poor service experiences would’ve stayed if a better service plan had been offered. With 33% remaining loyal if they thought the company would improve.
The reality is that telecommunications companies today must adopt a proactive approach in order to satisfy and engage customers. Doing so goes a long way towards attracting and retaining them.
The aforementioned survey also revealed that 79% of customers shared their negative experience with others and 73% spoke negatively about the company with friends, family, and colleagues.
When we factor in that 88% of people trust friend or family recommendations, negative word-of-mouth (NWOM) is far from ideal. Customers hold a huge influence on the success of your acquisition efforts.
That’s why every company should aim to deliver a seamless and memorable experience the moment customers sign up with them. Experience matters just as much as price and quality to telecoms users.
Many businesses are now leaning towards personalising their engagement to achieve positive outcomes. Propello Cloud’s 2025 Loyalty Uncovered Report reveals that over 84% of enterprise businesses consider data-driven personalisation a top priority for optimising customer experiences.
A recent Esendex study has reported a trend of difficult relationships between the telecommunications industry and consumers. It goes without saying that businesses in the sector must work to actively improve customer satisfaction.
Here’s the 4-step process telcos can use to boost customer satisfaction and loyalty.
The UK’s Telecommunications Security Act came into force in 2022, giving Ofcom (the Office of Communications) new powers to ensure UK telecom providers identified and reduced potential security compromises.
This was welcome news, as data breaches remain a real threat for businesses.
Official statistics from the 2025/2026 Cybersecurity Breaches Survey show that about 612,000 businesses and 57,000 charities in the UK experienced an attack in the past year. Meaning a more robust security infrastructure is necessary to protect all users.
As telecom customers use online services, they’re becoming more aware of data risks and how their personal information, i.e., payment details, may be vulnerable. A recent survey, for example, found that about 61% of web users believe their household could be targeted by a cyber attack.
Customers expect telecom providers to protect their personal data, and it’s now required by law.
Of course, nurturing customer loyalty via a platform like Propello Cloud also guarantees extra security protection. As our platform operates on the same security model as the MoD, which brings us onto our next point…
75% of consumers prefer companies that offer rewards. A CMO Council report states that 12% of customers switched providers because their current provider failed to reward their loyalty.
Customers want more value and rewards in exchange for brand loyalty. Loyalty programmes with personalised rewards, benefits, additional services, and exclusive partner deals are arguably the best customer retention tool for businesses.
Telecom brands often lack a personal touch. In such cases, customers will most likely search for other offers once their contract expires.
Reward programmes prevent this problem from happening; 70% of customers recommend brands with some form of loyalty scheme. Just remember, the way your loyalty programme works is what determines its success.
For example, to boost retention, rewards must offer real value. If your rewards are random and hard to redeem, your efforts might go to waste and customers will lapse.
Tailor customised rewards to the needs and preferences of your key customers to improve your chances of success in nurturing loyalty.
Modern customers want both omnichannel experiences and personalised service. They want to be able to seamlessly switch to the most convenient communication channel at any given time.
Personalised service used to be as simple as offering customers chat, voice, and email communication channels.
Today, customers need more than a multichannel approach.
For example, a customer may call technical support about a subscription issue. After the call, the customer might want a follow-up with someone else on another channel a few days later.
Omnichannel functionality is pivotal here in order to maintain continuity in conversations across those channels.
97% of consumers say that contact centre interactions affect brand loyalty, and 60% of customers will leave a brand if they have a bad experience with the contact centre.
The idea is to make communications seamless, frictionless and never frustrating. Customers want to know that help is always available.
No matter when, who or where they make contact, the conversation must appear as if it never ended. This goes a long way in creating a pleasant, stress-free and convenient experience.
As of 2020, Ofcom directed telecom providers to notify customers when their contracts were expiring to give them the chance to explore their options.
Less than a year after the announcement, 62% of broadband customers nearing contract expiry either switched to a new deal with their current provider or joined another network (Ofcom). Comparison platforms also experienced a web traffic increase during that period.
The current situation shows that transparency is essential for building trust. Customers can see their options and will act on them, and that cuts both ways.
The same openness that lets your customers shop around also puts your competitors’ customers in play, so there is an acquisition opportunity here too. Your first job, though, is holding on to the customers you already have.
Offer discounted extras to existing customers and show them how much they save against new-customer pricing. Better still, extend the same discount to them and anyone they refer, since people love to share a good deal.
Reward loyalty and you show customers you value them. Customers who feel valued are far less likely to look elsewhere.
Loyalty works differently across these sub-sectors because the reasons customers stay differ in each. The sub-sectors below show where each pressure bites hardest and how a well-built loyalty programme answers it.
Mobile users are loyal by habit, not by preference. Most stay put, but inertia explains that better than satisfaction does.
Which? research shows the big four networks hold the most loyal customers: 42% of Three customers, and at least half of those with EE, O2 and Vodafone, have stayed for more than five years.
Yet those same networks score lower on satisfaction and recommendation than their smaller rivals.
Which?’s most recent survey puts smaller providers such as Talkmobile, Tesco Mobile and Giffgaff above every one of the big four, with Three and O2 at the bottom of the table.
The gap between tenure and satisfaction is the key issue.
These customers are not staying because their provider has earned it. They are staying because nothing has yet pushed them to move, and that push is getting easier to act on. Text-to-switch now lets an unhappy customer change networks with a single free message.
Price sharpens the point. According to Which?, big four customers pay around £16 a month for a SIM-only deal against roughly £9 on smaller networks, often for the same coverage, since most smaller providers run on the big four’s own infrastructure.
Loyalty built on inertia holds only until leaving becomes easy. For mobile, that moment has arrived.
Tenure without satisfaction does not last. A customer who stays out of habit is one a competitor can take with a better offer and a two-minute switch.
The task is to turn passive loyalty into active preference. That means rewarding the customers who stay instead of saving the best deals for new sign-ups and closing the satisfaction gap that currently makes smaller networks the smarter buy.
Loyalty programmes give mobile providers a direct way to reward customer tenure. As networks gather richer customer data, they can segment more precisely and match rewards to how each customer actually uses their plan.
The value is in relevance.
A reward tied to a customer’s real habits, whether data, roaming or device upgrades, does more for retention than a generic perk. That kind of programme turns a monthly bill into an ongoing relationship and gives long-standing customers a reason to keep choosing the same network.
Energy loyalty is thin, and it runs on price. Customers stay while the deal holds and move the moment a cheaper one appears.
Brand intelligence firm Ello Group found that only 12% of customers trust their energy supplier in a survey that landed in October 2022 as the price cap rose by 80%. At the same time, 30% said rising costs were denting their trust in brands.
Switching follows the price. Almost six million customers switched electricity supplier in 2020 (Energy UK), but when the crisis wiped out cheaper deals, switching collapsed to around 1.3 million in 2022.
It recovered to about 3.2 million in 2024 as competitive tariffs returned, still short of pre-crisis levels, with roughly a third of customers having never switched.
That can look like loyalty, but it is inertia, and inertia lasts only until the next cheap deal lands.
Price alone cannot retain an energy customer, as a rival can always undercut it. A loyalty programme gives providers what a price cut can’t: a reason to stay beyond this month’s tariff.
Those that lead on genuine, value-adding rewards rather than price alone are the ones most likely to keep customers when the next cheaper deal appears.
Broadband loyalty still costs money, just less openly than it used to. Stay past your initial contract and you can end up paying more than a new customer would for the same line.
Citizens Advice put the broadband loyalty penalty at £61 a year per customer in 2022, down from the £113 it found in 2017 but still spread across around seven million paying adults.
The people who pay it are rarely the ones who can afford to. Older customers, those over 65, are twice as likely as younger-aged customers to stay in the same contract for more than ten years.
The reason the loyalty penalty persists is disengagement. Out-of-contract prices are rarely advertised and hard to find, and almost one in five customers don’t negotiate or switch at all.
The rules have tightened, but the pressure hasn’t gone.
Since January 2025, Ofcom has banned inflation-linked mid-contract price rises on new contracts, so any increase now has to be shown in pounds and pence upfront when you sign.
The hidden surprise is gone, but the rise isn’t. Providers moved to flat increases of around £3 to £4 a month, often a steeper jump on a cheap plan than the old inflation formula produced.
Add the out-of-contract premium on top, and the pattern holds: providers still work harder to win new customers than to keep the ones they have.
Loyal customers need a package that reflects their loyalty, with clear pricing, no unwelcome jumps, and a reason to stay beyond the deal they signed up on.
As full-fibre competition intensifies and trust stays low, the winners will be those who add value rather than quietly claw it back.
A loyalty programme offering exclusive partner deals and value-adding services turns a contract into a relationship and gives long-standing customers something a rival’s introductory offer can’t match.
For low-income households, social tariffs from around £10 a month, with no mid-contract rises, are part of that same shift from penalising loyalty to rewarding it.
Telecoms will always be in demand. Customers rely on connectivity for work, entertainment and everything in between. But demand isn’t the same as loyalty, and no provider is owed either.
Across mobile, energy and broadband, the pattern is the same. Customers stay while nothing pushes them to move and leave the moment something does. Switching gets easier every year, and regulators keep closing the gaps that once made inertia profitable.
The providers who hold on to customers will be those who give them a reason to stay. Reward the loyalty you already have, make the experience worth choosing again, and your best customers stop being the ones most at risk of leaving.
Effective loyalty programmes offer personalised rewards, tiered benefits, and exclusive deals. They leverage mobile apps for easy access and increase customer engagement. These programmes enhance the customer experience (CX), boost customer commitment, and reduce switching costs in the competitive telecom market.
Data analytics help telecom companies understand customer behaviour, predict churn, and personalise offerings. By analysing usage patterns and preferences, providers can tailor services, improve the customer experience, and target marketing campaigns effectively. This approach increases customer retention and expands the customer base.
Customer feedback is crucial for improving loyalty in telecoms. It provides insights into customer preferences and pain points, allowing companies to enhance their services. Regular surveys and responsive customer service teams help build stronger relationships with customers and drive positive word-of-mouth marketing.
AI and machine learning enhance customer satisfaction by enabling personalised interactions, predictive maintenance, and efficient problem-solving. These technologies help telecom companies respond to customers quickly, optimise network performance, and provide proactive customer service. This improves the overall customer experience and increases customer commitment.
To reduce churn, telecoms can implement personalised retention offers, improve customer service, and enhance network quality. Providing an excellent customer experience, offering competitive pricing, and leveraging data analytics to predict and prevent churn is key. Regular engagement and loyalty programmes also help maintain customer commitment.
Personalised customer service is crucial for retaining telecom customers. It builds stronger relationships, increases customer satisfaction, and promotes loyalty. By tailoring interactions to individual needs and preferences, telecoms can differentiate themselves in a competitive market and reduce customer churn through an enhanced customer experience.
Common challenges include high competition, price sensitivity, and rapidly evolving technology. Telecoms struggle with reducing churn, differentiating services, and maintaining network quality. Balancing innovation with customer needs, managing customer expectations, and providing consistent omnichannel experiences are ongoing challenges to maintaining customer loyalty.
A seamless omnichannel experience requires integrated systems, consistent messaging across platforms, and personalised interactions. Telecoms should ensure smooth transitions between channels, maintain customer history across touchpoints, and provide self-service options. This approach enhances the customer experience and strengthens relationships with customers.
Network infrastructure significantly impacts customer loyalty. Reliable, fast, and wide-reaching networks are fundamental to customer satisfaction. Investments in infrastructure improvements, including the 5G rollout, directly affect service quality and the customer experience. Superior network performance can increase customer retention and attract potential customers through positive word-of-mouth.
Balancing innovation with satisfaction involves focusing on customer-centric technologies, gathering feedback on new features, and ensuring reliable core services. Telecoms should prioritise innovations that enhance the customer experience, such as improved mobile apps and AI-powered customer service while maintaining excellent network performance and responsive customer support.
Explore the platform’s scalability, features and customisation options and get answers to your unique questions.
