This is the second report in a series addressing churn reduction. In the earlier MWP report Reducing Churn-Part 1: Best Practice Overview (Oct 2014) we looked at best practice strategies deployed by operators around the world to reduce churn. These strategies may be broadly grouped as follows:
- Improving the End-to-End customer experience to address the root causes of churn;
- Using value added services to increase customer stickiness;
- Using Big Data analytics and contextual real time marketing campaigns to address churn.
For this report, we take a closer look at churn in the Indian market because, with intense competition and a predominantly young prepay base with high levels of multiple SIM ownership, India provides excellent conditions for churn to flourish. However, the collective mobile industry in India, the Indian regulator and individual operators are waging a concerted war on churn. Indian churn rates remain higher than average but they are decreasing.
This report explores how the industry as a whole has reduced churn rates and also how Indian operators are using sophisticated data analytics and contextual marketing for churn reduction.
Table of Contents
1. Overview
2. Introduction
- 2.1. Background to the Report
- 2.2. Report Content
- 2.3. Currency and Conversions
- 2.4. Further Questions and Feedback
3. The Indian Mobile Market
- 3.1. Country Overview
- 3.1.1. Young Predominantly Rural Population
- 3.1.2. Slow Growth, High Inflation Economy
- 3.1.3. 270 Million Below the Poverty Line
- 3.2. Market Overview
- 3.2.1. Market Size and Growth Rate
- 3.2.2. Rural Mobile Penetration Lags Behind
- 3.2.3. Teledensity
- 3.2.4. Market Share
- 3.3. Churn Trends
- 3.4. Key Factors Influencing Churn in India
- 3.4.1. High Prepay Predominance
- 3.4.2. Large Youth/Value Seeker Segment
- 3.4.3. High Level of Multi-SIM Usage and Devices
- 3.4.4. Primary and Other SIM Phenomenon
- 3.4.5. Intense Price-based Competition
- 3.4.6. Desire for Internet and New Smart Devices
- 3.4.7. Mobile Number Portability
4. Churn Rates Altered by Market Changes
- 4.1. Market Consolidation
- 4.2. The Rise of Data
- 4.3. Market Rationalisation of Customer Acquisition
- 4.3.1. Revised Approach to Commissions
- 4.3.1.1. Commission Levels Reduced by Approximately 30%
- 4.3.1.2. Volume Based Commissions Replaced by Flat Fee
- 4.3.2. Reduction in First Recharge Coupon Benefits
- 4.3.3. Stringent Acquisition Process Introduced by Regulator
- 4.3.4. The Impacts
5. Operator Churn Reduction Initiatives
- 5.1. The Multi-SIM Challenge
- 5.2. Increasing Share of Wallet from Multi-SIM Customers
- 5.3. Data Analytics and Contextual Marketing
- 5.3.1. Vodafone India - Real Time Marketing
- 5.3.2. Aircel - Micro-Segmentation
- 5.3.3. Flytxt - Ask for Credit Campaign
- 5.3.4. Idea Cellular - Customer Value Maximisation
- 5.3.5. Bharti Airtel - My Airtel My Offer
6. Conclusions
Appendix - Feedback Questions