Customer Segmentation and Customer Churn Analysis System for Telecom Companies

Abstract

The advent of 5G technology and the shifting customer preferences have created a lot of opportunities for telecommunication (telco) companies. Such immense business opportunities have also led to fierce competition in the telco market, accompanied by a high customer churn rate. It is pressing for telco operators to come up with effective marketing strategies based on extensive customer analytics to prevent customer turnover and bolster company revenue. Customer analytics in the telco industry consists of two key components, namely churn prediction and customer segmentation. As the telco market tends to be saturated, too much focus on attracting new subscribers is no longer applicable to the telco industry. The cost of attracting new customers by investing considerable resources is confirmed to be significantly higher than the cost of retaining existing customers. In this context, churn management becomes instrumental in the telco industry. Key Words Business, churn prediction, Bayesian analysis, customer segmentation.