paid relationships. The Fixed-Term Contract Model In some markets people are required to sign up for service as part of long-term but fixed duration contracts. Contract periods of one, two, or even three years are common. Again, depending on the country and the regulation, some people might be required to pay monthly fees for the service; others may get the subscription for free. Some will pay per minute or per second for the service received; others might pay a flat monthly fee and use as much service as they want. Sometimes people pay penalties for terminating a contract early. Obviously, in markets where contracts are the rule, the nature of the contracts will do much to define the shopping cycle. eXcellence in Telecommunications The Telco Churn Handbook The Pay-As-You-Go Model In some markets, fixed-term contract arrangements may be forbidden by regulators or allowed to coexist with other kinds of arrangements. Here, consumers are able to change carriers at any time without the constraint of contractual obligations. We call these pay-as-you-go models because consumers pay only for what they use when they use it and not as the contract implies or enforces. One might assume that a pay-as-you-go model guarantees a very high rate of churn. Many times it does, but often it does not. This is because consumers still have to deal with the hassles of changing phone numbers and billing arrangements when they change carriers. This can be a source of inconvenience for them. In these markets, the shopping cycle is shorter than in the contract case and is based on how badly consumers want the benefits that competitors offer versus the costs of changing. When the benefits outweigh the costs, the consumers change. The Prepaid Model The most interesting and newest of the business models are in markets where prepaid service is taking hold. There, almost all of these barriers have been removed. In a modern prepaid market, customers change carriers by simply switching the subscriber identity module (SIM) cards in their handsets 