Telecom Churn Prediction

Case Studies

Kunal Das
Yogesh Kumar Pati
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The telecom industry is highly competitive, with customers having multiple service providers
to choose from.

One of the biggest challenges faced by telecom companies is customer churn, which refers
to customers switching from one operator to another.

Customer churn can lead to revenue loss and increased costs, making customer retention
crucial for telecom companies.

Brief Overview of Acquiring new customers is costly, typically 510 times more expensive than retaining existing
customers.
the Telecom
Retaining highprofitable customers is particularly important for incumbent operators.
Industry and the
Customer retention is equally, if not more, important than customer acquisition for telecom
Challenge of companies.

Customer Churn Retained customers are more likely to generate recurring revenue and contribute to
longterm profitability.

Customer retention is more costeffective compared to acquiring new customers, which

involves marketing expenses and promotional costs.

Prioritizing customer retention involves strategies to enhance customer satisfaction, loyalty,

and reduce churn.

By focusing on customer retention, telecom companies can reduce revenue leakage and
improve overall business performance.
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The dataset used in this project is customerlevel data from

a leading telecom firm.

Explanation
It contains information about individual customers and
their interactions with the telecom services.

of the
Dataset The dataset includes a variety of variables that capture
customer behavior, usage patterns, and demographics.
Used in the
These variables provide valuable insights into customer
Project preferences, engagement, and potential indicators of
churn.

By analyzing this dataset, we can uncover patterns and

trends that help predict which customers are at high risk of
churn.

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Churn Definition

Definition of churn in the telecom industry: Churn refers to the phenomenon of customers switching
from one telecom operator to another. It is a crucial metric in the industry as it indicates the rate at
which customers are leaving a service provider.

Explanation of the usagebased definition used in the project: In this project, churn is defined
based on customer usage behavior. For prepaid customers, churn occurs when they have not
utilized any services, such as outgoing calls, SMS, or mobile internet, over a specific period of
time. This definition allows for identifying customers who have stopped using the services and
are at risk of switching to another operator.

Differentiating churn in postpaid and prepaid models: Churn is easier to determine in postpaid
models, as customers typically inform the operator when they want to terminate their services. In
contrast, churn in prepaid models is more challenging to identify, as customers can simply stop
using the services without notice. The project focuses on churn prediction for prepaid customers,
considering the unique characteristics and challenges associated with this model.

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Objectives: Analyze telecom customer data, predict

churn, and derive business insights.

Analysis: Comprehensive data analysis to understand

customer behavior and preferences.
Project
Goals Prediction: Develop models to forecast customer
churn and identify highrisk customers.

Insights: Provide actionable insights to reduce churn

rates and improve customer retention.

Data Preprocessing: Clean, handle missing values,

remove duplicates, and standardize data formats.

Feature Engineering: Transform raw data into

meaningful features to enhance model performance.

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Churn Prediction
Churn Prediction Models: Built Model Description: Employed
predictive models using advanced techniques such as
machine learning algorithms to Random Forest and Logistic
Models identify customers at high risk
of churn.
Regression to capture complex
relationships in the data.

Evaluation Metrics: Assessed Performance Assessment:

model performance using Conducted rigorous evaluation
various metrics including to measure the effectiveness of
accuracy, sensitivity, and the models in predicting churn
specificity. accurately.

Insights and
Recommendations: Derived
insights from the model results
to provide actionable
recommendations for reducing
churn and improving customer
retention strategies.

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Results and
Insights
T OT A L C U S T O M E R C H U R N
D ETAIL S

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Results and Insights
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C U S TO M E R I N S I G H T S

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Results and Insights

• Several factors compared with Churn

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Offer personalized STD calling plans: Leverage the insight that customers making
more STD outgoing calls in August tend to have higher value or engagement. Create
targeted STD calling plans or special promotions during this period to encourage
customer engagement and reduce churn.

Enhance STD incoming call experience: Focus on enhancing the customer experience
for STD incoming calls, as customers receiving more STD incoming calls in July tend to
Business have higher value or engagement. Provide better call quality, reliable connections, and
attractive STD incoming call packages to retain these high-value customers.
Recommendations
Provide special roaming offers: Since customers making more outgoing calls while
roaming in July tend to be more valuable, consider providing special roaming offers,
affordable international calling rates, or tailored packages. This strategy will cater to the
needs of customers who frequently travel and help retain them.

Diversify calling patterns and services: Investigate ways to encourage customers to

diversify their calling patterns or explore other services within your business. This will
increase customer engagement and reduce the likelihood of churn among high-value
customers who may be solely relying on a specific service.

Improve value proposition for STD calls to fixed lines: Analyze strategies to improve the
value proposition for customers making STD calls to fixed lines in August. Consider
offering bundled packages or discounted rates for these types of calls to incentivize
high-value customers to continue using these services.

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Offer attractive ISD incoming call plans: Since customers receiving more ISD incoming calls
in July tend to have higher value or engagement, consider offering attractive ISD incoming
call plans, competitive international calling rates, or promotions. This will cater to the needs
of customers with international connections and encourage them to stay.

Enhance local outgoing call offerings to other operator mobiles: Implement strategies to
Business improve the attractiveness of your local outgoing call offerings to customers using other
operator mobiles in July. This could include competitive pricing, value-added services, or
Recommendations targeted marketing campaigns to retain high-value customers.

Customize special outgoing call packages: Evaluate the nature and purpose of special
outgoing calls and identify ways to enhance their value or relevance for customers.
Introduce customized special call packages, exclusive features, or discounts to encourage
high-value customers to make more of these special outgoing calls.

Promote higher-speed data services: Analyze the trend of customers opting for 2G sachet
recharges in July, which suggests lower value or engagement. Promote higher-speed data
services and encourage customers to upgrade to more advanced data plans to retain high-
value customers who require faster data speeds.

Provide exceptional customer service: Regardless of the specific insights, delivering

exceptional customer service is crucial for retaining high-value customers. Focus on
personalized interactions, prompt issue resolution, and proactive communication to build
strong relationships and loyalty.

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Conclusion

Churn prediction is a vital process for telecom companies to identify and retain their most
valuable customers.
By using data analytics and machine learning techniques, telecom companies can
analyze customer behavior, preferences, and needs, and segment them into different
groups based on their churn risk.
This enables telecom companies to design and implement personalized and targeted
retention strategies, such as offering incentives, improving service quality, enhancing
customer satisfaction, and increasing customer loyalty.

We have provided quite a few insights and advice which can help telecom company to
retain high value customers and have better profits
Churn prediction can help telecom companies reduce customer attrition, increase
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revenue, and gain a competitive edge in the market.