Focusing in churn management as a growth driver.

In the last couple of years telecom churn has become a key lever with direct impact on EBITDA performance in both emerging and mature markets. Therefore, a retention strategy is becoming critical in order to reduce costs and increase revenues.

Here at mmC Group, we believe that it is not enough to produce a churn prediction model and that is necessary to fully understand the underlying reasons driving churn. That is why we focus all of our experience in helping telecom operators understand the churn drivers at work in their company. Our deep diagnostic analysis provides a full understanding of the reasons behind churn and prioritises the actions to obtain the maximum benefit.

I want to share one of our latest cases to show how our approach has a direct impact on EBITDA earnings, reducing costs and improving the operator’s customer base value.

The case itself relies in a market recently characterized by a double-digit growth rate in terms of subscribers during the last three years. The postpaid base had a low share in the market and our client’s postpaid subscribers were just 10% of the total base and 17% of the revenues. The prepaid segment was dominated by three main players with stable market shares.

At the moment of mmC’s arrival, our client was the market leader with 35% market share, while the two main competitors had 30% and 20% respectively, although the gap had decreased slightly over the last years. Churn was becoming a major issue for our client, traditionally best-in-class in the market, but with a worrying deteriorating trend.

Our client’s prepaid churn rate changed from 2.7% to 3.4% while the competitors’ remained more stable (from 3.4% to 3.7% and at a constant 3.2% respectively. Additionally, churn increase in a growing scenario was affecting financial results as total SAC evolved similarly mmC was commissioned to understand churn levers and design an action plan to reduce churn rates and improve the financial results.

Please find next the detailed case. Enjoy the reading.

Best

CVA. Flying from Santiago to Sao Paulo.