Analysis of Grameenphone churn customers

Abstract

Churn is frequently spoken of in a communications context, where it refers to the tendency of internet and cell-phone subscribers to switch providers. The most common reasons for churn are dissatisfaction with an existing provider, the lure of a lower price for equivalent service from a different provider, and the lure of better service for the same price from a different provider. Churn can also result from a change in the subscriber's geographic location, the desire for increased connection speed, or a need for different or enhanced cell-phone coverage. Higher rate of churn is an eminent problem for companies like Grameenphone Ltd whose services employ substantial hardware at the subscriber site. Gross addition had been one of the major factors behind Grameenphone's revenue growth. However, this has slowed down recently. In the face of stiffer competition and declining voice revenue, Grameenphone saw its existing subscriber base as one of its main competitive advantages, alongside network quality and coverage. The company therefore decided to focus on maintaining and improving the profitability of its valuable subscribers by expanding the consumption of non-voice and value-added services. According to Asif M K Bashar Khan, General Manager of BI Planning and Systems at Grameenphone, “To do this, you have to start by understanding what kind of customers you have and what they want. If you retain their business by making the right offers, this is more effective than recruiting new customers.” The company started doing churn-prevention analysis and micro campaigns based on micro segments of the customer base. This report is based on one of the churn studies that try to identify the reasons of customer switching and ways to retain them.