Predictive churn modeling in the wireless industry

Ksenija Draskovic-Krunic

This paper describes a recently completed project at Verizon Wireless that addresses the problem of customer attrition (churn).

Predictive Churn Modeling In The Wireless Industry

Ksenija DraskovicKrunicVerizon Wireless

PROBLEM: CUSTOMER CHURN

Churn is defined in the telecom industry as the number of customers disconnected during a month vs. the total size of active customer base, and is usually expressed as a percentage. It measures the loss of customers, usually to competitors, and for a provider to maintain its customer base at a constant size (let alone grow it) requires that these lost customers be replaced by acquiring new ones, with associated costs of acquisition.

For wireless providers in the United States, the industry average churn is...

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