Mobile Churn Management

This publication has been discontinued on November 23, 2011.

Introduction

Abstract

Retaining customers is one of the most critical challenges in the maturing mobile telecommunications service industry. This report addresses what is the next major battle for mobile operators. It defines what mobile churn is and establishes key issues in minimizing churn and achieving optimum customer loyalty and retention strategies.

• Why did Churn Management take a strategic dimension among mobile operators?
• What are the costs and causes of churn?
• How to tackle customer churn?
• What are the main actions to leverage customer loyalty and reduce churn?

Table of Contents

1. Introduction

• 1.1. Mobile markets are close to saturation in advanced economies
• 1.2. Fierce mobile competition is increasing
• 1.3. ARPU levels are still falling or stagnating

2. Defining churn

• 2.1. Churn definitions and types
  • 2.1.1. Two major categories of churn
  • 2.1.2. Churn comparison limits and costs
• 2.2. Churn landscape and analysis
  • 2.2.1. Worldwide churn levels and trends
  • 2.2.2. Churn analysis
• 2.3. A multitude of churn drivers

3. Minimising churn

• 3.1. Churn management strategic approaches
  • 3.1.1. On the offensive - continued expansion
  • 3.1.2. On the offensive - predatory acquisition
  • 3.1.3. On the defensive - retention management
  • 3.1.4. Factors of effective churn management
• 3.2. Churn management tools and avenues
  • 3.2.1. Lock-in mechanisms
  • 3.2.2. Reactive management
  • 3.2.3. Proactive approach
  • 3.2.4. Loyalty programmes
  • 3.2.5. Wrap-up/ conclusion

List of Tables & Figures

• Table 1: Competitive intensity in EU5
• Table 2: Examples of switching costs for mobile telephony in France
• Table 3: Overview of delays in MNP processes in Western Europe
• Table 4: Comparison of national baseline situations
• Table 5: Overview of customer retention tools
• Table 6: Overview of handset subsidy policy in South Korea
• Table 7: A1 retention propositions

• Figure 1: Mobile subscribers net additions in EU27
• Figure 2: Mobile penetration as % of population in EU27
• Figure 3: Selected ARPU trends of Vodafone Western European subsidiaries
• Figure 4: What is happening in Western European mobile markets?
• Figure 5: Taxonomy of churn
• Figure 6: Resulting growth of average subscriber tenure after 1% reduction in annual churn rate
• Figure 7: Worldwide net monthly churn rates by region
• Figure 8: Net monthly churn in the world
• Figure 9: Monthly blended churn rates in UK
• Figure 10: Churn levels in UK and the Netherlands compared with Western European average
• Figure 11: Monthly blended churn rates in Spain
• Figure 12: Monthly blended churn rates in the Netherlands
• Figure 13: Monthly blended churn rates in Germany
• Figure 14: Monthly blended churn rates in the USA
• Figure 15: Blended versus prepaid churn rates for Vodafone group subsidiaries in Western Europe
• Figure 16: Blended versus prepaid churn rates for Orange Group subsidiaries in Western Europe
• Figure 17: Orange subsidiaries monthly churn rates in Western Europe
• Figure 18: Vodafone subsidiaries monthly churn rates in Western Europe
• Figure 19: T-Mobile subsidiaries monthly churn rates in Western Europe
• Figure 20: Churn reduction is a high priority objective to increase profitability
• Figure 21: Resultant incremental CLV with different hypotheses of churn reduction and ARPU level
• Figure 22: Resultant incremental Customer Life Value with different hypotheses of churn reduction and different ARPU level
• Figure 23: General pattern for mobile distribution
• Figure 24: Comparison between churn rates and SAC/SRC for selected Western European MNOs
• Figure 25: Cumulated mobile ported numbers as % of total mobile customer base
• Figure 26: Taxonomy of churn and reasons for churning
• Figure 27: Gap between customer expectations and experience and MNO objectives
• Figure 28: Learn, earn or churn - the steps towards customer loyalty
• Figure 29: Effective customer value management
• Figure 30: Levels of churn prevention initiatives
• Figure 31: The customer lifetime cycle

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