onditions Handset churn is obviously not a problem for long distance and CLEC providers, but for wireless carriers in certain markets it can be extremely important. In a market where consumers pay full price or close to full price for the handset, the customers have nothing to gain by changing carriers. If they want a new handset, they simply buy it and keep their current carrier. In subsidized markets it is a different situation. Here, the wireless provider pays for much of the cost of the handset assuming that the customer will pay the company back for the investment in phone utilization. Unfortunately, it is very easy for customers to switch phone companies every three to six months, get a brand new handset, and lose nothing in the process. This turns out to be a very eXcellence in Telecommunications The Telco Churn Handbook good deal for the customers, but the provider is not able to recoup the investment before the churn happens. Feature/Function Churn Similar to handset churn is churn that happens for new features and functions. In this situation the customer discovers that there are new features available from a competitor and then switches carriers to gain access to them. Customers who want or need to have voicemail, call forwarding, wireless application protocol (WAP), short message service (SMS), Dial-A-Joke, or any other kind of ancillary service will look for and switch to the carrier that offers it. Network Churn Handset churn and feature/function churn are relatively easy to combat by simply making sure that you can give to the customers what they are looking for. Network churn, however, is a much more difficult problem to address. Network churn occurs when alternative, newer network technologies enter your market and consumers are offered the opportunity to upgrade to the newer service. In wireless, the most recent cases of network churn occurred in the early-established AMPS markets. These markets were very quickly overcome by the second-generation wireless technologies (TDMA, CDMA, and GSM). In t