ysis from around the world is in, and it is clear, without doubt, that the countries with the more liberal, more aggressive deregulations are the ones with the best quality, lowest-cost services. Because of this evidence, more and more governments are changing their deregulatory schedules and are increasing the rate at which competitors enter into the marketplace. The Competitors Of course, the real reasons for churn is not technology, consumers, or regulators, but competitors. It is the competitors who develop new networks, new offerings, introduce newer technologies and, most importantly, reduce prices. If there are competitors in your marketplace that are hungry for new business, you can be assured that the first place they will look is to the ranks of your customers. CHURN Is EXPENSIVE Not only is churn an inevitable part of doing business in wireless, it is also proving to be an extremely expensive experience. Churn has many consequences, and most of them carry a large price tag. Chapter 1 Lost Customers = Lost Revenue The biggest consequence of churn is, of course, the loss of revenue. Depending on the country, the average customer brings in anywhere from US$20 to US$80 per month. The loss of a large number of cus- tomers can create a big dent in the corporate balance sheet. Lower Rates = Lower Revenue Direct loss of revenue through the reduction in subscribers is only one of the hard costs associated with churn. Also endemic to the churn environment is the sometimes drastic reduction of billing rates. When churn starts to happen, most companies react by dropping their prices. They try to convince customers that they are competitively priced and that customers don't need to leave to get good prices. This reduction of rates leads quite logically to a reduction in annual revenues for the firm. eXcellence in Telecommunications The Telco Churn Handbook The Cost of Reacquisition Despite their best efforts to prevent churn, the company will inevitably lose some of its customers to the competition sooner or later.