Churn rate is also sometimes called attrition rate. It is one of two primary factors that determine the steady-state level of customers a business will support. In its broadest sense, churn rate is a measure of the number of individuals or items moving into or out of a collection over a specific period of time. The term is used in many contexts, but is most widely applied in business with respect to a contractual customer base. For instance, it is an important factor for any business with a subscriber-based service model, including mobile telephone networks and pay TV operators. The term is also used to refer to participant turnover in peer-to-peer networks.
Churn rate, as applied to a customer base, refers to the proportion of contractual customers or subscribers who leave a supplier during a given time period. It is a possible indicator of customer dissatisfaction, cheaper and/or better offers from the competition, more successful sales and/or marketing by the competition, or reasons having to do with the customer life cycle. The distinction is usually made between voluntary and involuntary churn. Involuntary churn occurs when the company terminates the customers’ contract or account usually on the basis of a poor payment history. Voluntary churn is when the customer decides to take their business elsewhere.
The churn rate can be minimized by creating barriers which discourage customers to change suppliers or through retention activities such as loyalty programs. It is possible to overstate the churn rate, as when a consumer drops the service but then restarts it within the same year. Thus, a clear distinction needs to be made between ‘gross churn’, the total number of absolute disconnections, and ‘net churn’, the overall loss of subscribers or members. The difference between the two measures is the number of new subscribers or members that have joined during the same period. Suppliers may find that if they offer a loss-leader “introductory special”, it can lead to a higher churn rate and subscriber abuse, as some subscribers will sign on, let the service lapse, then sign on again to take continuous advantage of current specials.
When Rajesh Sawhney, President Reliance Entertainment presented Zapak gaming plans to the chief of RCom, Anil Ambani, Anil is understood to have said Rajesh, Get Gaming Buddy. This has equally motivated the chief of wireless division, Shukla to drive the falling ARPUs higher by offering value added services and content on Mobile. RCom today became the first company in India to launch a mobile feature film, Ctrl+Alt+Del??? starring Rahul Bose to Reliance Mobile subscribers.
Ctrl+Alt+Del is a 25 minute movie under the genere – Romance has won acclaim at various international film festivals [Atlanta and Plam Beach International festivals]. The movie is accessible on Reliance Mobile under Movies N More??? and is available at price of Rs 15 per 5 Minute online streaming.
Qualcomm Inc. on Thursday lowered its profit estimate for its fiscal first quarter, citing higher-than-expected legal costs and customer’s deferred payment.
The San Diego-based company said it expects to earn from 35 to 36 cents a share during the three-month period ending Dec. 31, compared to its previous estimate of 35 to 37 cents a share. The revised estimate includes a loss of 1 cent a share from its strategic investments unit, compared with a loss of 2 cents a share in its previous projection. It also includes a charge of 5 cents a share for share-based compensation.
In addition to the legal expenses, Qualcomm said it has not received payment from the Pantech Group of South Korea.
Qualcomm said it expects first-quarter revenue on the high end of its previous estimate of $1.98 billion to $2.08 billion, saying chipset shipments were higher than anticipated.
In the fiscal first quarter of 2006, Qualcomm earned 36 cents a share and posted $1.74 billion in revenue.
The revised projections were announced after the close of trading. Its shares rose 23 cents, or 0.6 percent, to $38.54 on the Nasdaq Stock Market, then fell 79 cents after hours.
Seiko Epson Corp. has developed an ultra-sensitive, ultra-compact GPS module to meet high demand from manufacturers of mobile phones and other handsets with GPS functionality. Volume shipment of the S4E19863 series has already begun, the product has been loaded in all GPS-capable models of the FOMA903i series phones recently released by DoCoMo. According to the companies press release this chip is the world’s smallest commercial GPS module at 7 mm x 6 mm x 1.28 mm.
Pune based telecom software servics company Tech Mahindra has signed a five-year outsourcing deal with British Telecom (BT) that is expected to generate revenues of over $1 billion. This is the largest contract bagged by any software services firm in India.
The company will support BT’s planned growth of managed services to business customers around the globe and continue to provide ongoing services related to BT’s internal systems, processes and reusable platforms.
BT is already the largest customer for Tech Mahindra and contributes over 69% of its total revenues. The company had revenues of $270 million in 2006. The deal could potentially nearly double the firm’s revenues next year. However, analysts are skeptical about whether such high numbers will be realized.
BT itself is bidding for outsourcing deals across the world so it’s possible BT may decide to pass on some of the wins to Tech Mahindra.
Since there appears to be a significant subcontracting component to this deal, the actual size of the contract will depend upon several factors, including BT’s own ability to get customers,??? said Siddharth Pai, a partner at the strategic analyst firm TPI.
Both companies have a 20-year history together. Tech-Mahindra was earlier called Mahindra-British Telecom (MBT), and it was a joint venture between British Telecom and Mahindra & Mahindra. MBT was renamed Tech-Mahindra before it went public earlier this year.
British Telecom has a 36% stake in Tech Mahindra. Mahindra group holds 51% in the company, while the remaining is with public.
MTC Atheer, one of the three nationwide cellcos operators in Iraq, has announced that it has signed up over three million subscribers since first launching commercial operations in March 2004. In a statement Ali Dahwi, the firm’s chief executive, said that USD430 million had been invested in the Iraqi market in that time, and further money would be injected in the future to expand MTC’s infrastructure in the north. According to TeleGeography’s GlobalComms database the three nationwide operators, MTC Atheer, Asia-Cell and Iraqna (Orascom Telecom Iraq), had a 30% market share each, with the remainder split between Kurdistan operators Sana Tel and Korek Telecom.
Russia’s second largest cellco Vimpelcom, which had close to 47 million subscribers at the end of September 2006, has put in a bid for the third GSM licence in Moldova. The cost of the licence had been set at USD8 million, and two Moldovan companies, Union-Prim and Eventis Mobile, have also submitted bids. Moldova had just over a million mobile subscribers at the end of Q3 2006, of which Voxtel had 65% and Moldcell the other 35%.
The European Commission (EC) has ruled that the Czech Republic’s procedure for awarding 3G mobile network operator licences did not constitute â€˜illegal state aid’, writes AFX news. In 2005 the Czech government issued the third 3G concession to Oskar, now a wholly owned unit of the UK’s Vodafone Group, at a significantly lower price than the two previous licences. However, the EC considers that the difference in cost reflected the ‘spectacular’ drop in prices in the 3G market, rather than â€˜discrimination’ against the two other operators. Rival cellcos Eurotel Prague (now known as Telef³nica O2 CR) and T-Mobile Czech paid EUR105 million (USD93 million) and EUR115 million respectively for their licences in 2001, while Oskar paid EUR66 million for its licence four years later. The Commission’s study found that the Czech authorities applied the same procedures in 2005 though, and the lower price reflected the fall in revenue across the market.
Ericsson of Sweden and Japanese mobile operator Softbank Mobile have signed a contract for the expanded deployment of High Speed Packet Access (HSPA) equipment in Japan. Under the contract Ericsson will upgrade Softbank’s existing network with the advanced technology for its mobile broadband network needs.