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Network Security Threatens Operator Revenues

Research shows consumers will switch networks over security issues
One-in-four say they would switch – one-in-three say they have done
Clear evidence security concerns mean consumer trust is under threat

Bristol, November 29: Research commissioned by Evolved Intelligence shows that an overwhelming 80 percent of mobile subscribers would lose trust in their mobile operator’s brand if it suffered an attack by hackers and fraudsters hijacking the network signalling system known as SS7. Indeed, some 25 percent of the customers said it was likely they would change their mobile operator as a result.

What’s more, when the research focussed solely on the customers who had suffered any form of attack, it found that 33% percent had changed or intended to switch provider.

The research was carried out for Evolved Intelligence by mobile industry specialists Mobilesquared, who surveyed some 2000 mobile consumers in the UK and Germany. Commenting on the results, Founder and Chief insight analyst Nick Lane said:

“It’s clear that security is becoming a priority for consumers as their awareness of cyber-attacks increases. They believe their mobile device is secure. But the networks are a different matter and the research shows that trust in the mobile operator will become a major differentiator.

“Once consumers understand the network threat from SS7 fraudsters,” he said, “protection will become almost as important as price, when selecting their next mobile operator.”

As operators look to address the challenge of security, the research shows that their concerns will move beyond just the prospect of customers switching networks. An attack by fraudsters would also see 36 percent of consumers stopping or reducing their use of many mobile services – with mobile banking and payment services particularly hard hit. There seems little doubt that average revenue per user would suffer overall.

“Following increased media attention – including a demonstration of the problem on TV in America and reports of at least one successful banking fraud attack – knowledge of the security threat from SS7 is moving from the mobile technology community to a mainstream audience,” said Evolved Intelligence Product Director Steve Buck. “It therefore seemed a good time to commission this research to gauge and measure consumer attitudes in a changing environment.

“Frankly, the results are quite startling,” he said. “With knowledge of the threat, many consumers would rank network security second, only behind price, when choosing a mobile operator. What’s more, the numbers who would switch service providers, stop using services or cut back on usage after a network attack, make for very sober reading.

“The better news is that the research also shows that customers are very loyal,” he continued, “with 49 percent staying with the same mobile operator for more than three years. However, that loyalty is severely damaged by any weakness in network security, and mobile operators need to act now to protect consumer trust in their brands.”