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Executive Insight Report: Driving EBITDA Through Customer Loyalty

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

Price: EUR 2,500.00 / GBP 2,000.00

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Table of Contents

1
Overview
1
2
Benchmarking MNO EBITDA Levels
2
3
EBITDA and Churn
4
4
Churn Reduction Initiatives
8
4.1
Traditional Loyalty Programs
8
4.2
Fixed Mobile Convergent Offers
10
4.3
Sticky Tariffs
12
4.4
Terminating Call Credit
13
4.5
Extended Service Contracts
14
4.6
Hybrid Solutions
15
4.7
Incentivising Postpay Migration
15
4.8
Service Guarantees
16
4.8.1
Network Service Guarantees
16
4.8.2
Competitive Pricing
17
4.9
Activity Stimulation Initiatives
17
4.10
Channel Revenue Share
18
4.11
Cross/Up-Selling of VAS
18
4.12
Handset Subsidy Reduction
19
4.13
Churn Prediction/Social Network Analysis
20
5
Churn Reduction Initiatives: Impact
21
6
Conclusions/Recommendations
23