Abstract
This paper is the first in a series of MWP Executive Insight Reports focusing
on opportunities to improve Mobile Operator EBITDA. Mobile Operators are
struggling to improve service profitability against a background of increased
competition and declining interconnect and roaming margins. Strategies being
implemented to address this challenge include efforts focused on organic
growth, acquisition-based growth, revenue stimulation and cost reduction.
Increasing the lifetime of the average customer also offers significant
potential to improve EBITDA but our analysis suggests that this is largely
overlooked in operator strategies to increase service profitability. All
operators monitor churn and attempt to combat it but few appreciate or track
its impact on EBITDA. The current paper addresses this oversight and puts
forward the case for a much more rigorous assessment of the relationship
between ' customer lifetime' and ' service profitability' .
In particular the current paper:
- Quantifies the potential impact of churn reduction on EBITDA
- Analyses and assesses the merits of 14 different churn reduction strategies
- Recommends 5 primary churn reduction strategies offering the greatest
scope for enhancing service profitability
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