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MUMBAI: Indians may not change their mobile handsets too often, but when it comes to cellular service providers, churn rates here are one of the highest in the world — 5-6 per cent per month, which largely occurs in the pre-paid segment.

With the going slated to get tougher as fourth operators swing into action, existing players have started harnessing software tools to enable better churn predictions.

The reasons for churn differ with each market. Airtel, the Bharti group’s cellular service, found dropped calls and wrong tariff plans to be the chief culprits in Delhi.

BPL Mobile in Mumbai makes a distin- ction between voluntary hurn, for reasons like change of city or loss of handsets, and involuntary churn, prompted by issues like large unsettled bills where the customer becomes untraceable.

India being an emerging market has higher churn rates as compared to developed markets like Australia and Hong Kong, according to research firm Gartner.

Says Gartner analyst Kobita Desai, “Developed markets like Australia and Hong Kong have a monthly churn rate of 3 per cent, which usually occurs in the post-paid segment. India, being an emerging market, is driven by the pre-paid segment.”

Airtel has been one of the earliest adopters of software to control churn in the Indian market. The company  implemented SAS Institute’s customer retention solution a year ago in Delhi and plans to do the same for Mumbai, when it launches services.

BPL Mobile (Mumbai) president and COO Deepak Verma said the company is in talks with both SAS and Computer Associates to adopt a similar solution. Its rival Orange is also expected to follow suit.

While software solutions predicting churn are suddenly popular with Indian companies now, they have been in use for about five years in Europe and the US, said SAS India CEO and managing director Gourish Hosangady.

BPL currently uses an in-house software package to predict churn. “With volumes increasing, we need a more specialised package which will build in more parameters to monitor customer
behaviour. It will also help us to target the right customers when we acquire subscribers, since this would have an impact on long-term retention. Retention costs are at least five time lower
than new acquisitions,” says BPL’s Verma.

BPL puts the annual industry churn rate at 48 per cent in the re-paid segment and 30 per cent in the post-paid segment. BPL’s case for getting focused on churn solutions seems logical in the light of Airtel’s imminent entry in the Mumbai market.

In Delhi, Airtel has implemented the SAS solution only in the post-paid segment, but plans to extend it to the pre-paid segment as well, according to Mohit Deora, chief marketing officer, Airtel (Delhi).

“An example of how the solution helps is with respect to tariffs plans. We were able to realign tariff plans best suited to customers and rationalise their billing cycles.” said Deora.