Madden, Gary G and Savage, Scott J and Coble-Neal, Grant (1999): Subscriber churn in the Australian ISP market. Published in: Information Economics and Policy No. 11 (1999): pp. 195-207.
Download (65Kb) | Preview
Rapid growth in Internet use, combined with easy market entry by Internet service providers (ISPs), has resulted in a highly competitive supply of Internet services. Australian ISPs range in size from a few large national operators to niche ISPs focused on specialised service. With many ISPs currently not profitable, subscriber retention is an important aspect of survival. This study develops a model which relates the probability of subscriber churn to various service attributes and subscriber characteristics. Estimation results show that churn probability is positively associated with monthly ISP expenditure, but inversely related to household income. Pricing also matters with subscribers preferring ISPs which offer flat-rate pricing arrangements.
|Item Type:||MPRA Paper|
|Original Title:||Subscriber churn in the Australian ISP market|
|Keywords:||Internet; customer churn; pricing|
|Subjects:||L - Industrial Organization > L9 - Industry Studies: Transportation and Utilities > L96 - Telecommunications
O - Economic Development, Technological Change, and Growth > O3 - Technological Change; Research and Development; Intellectual Property Rights > O33 - Technological Change: Choices and Consequences; Diffusion Processes
C - Mathematical and Quantitative Methods > C9 - Design of Experiments > C93 - Field Experiments
|Depositing User:||Gary G Madden|
|Date Deposited:||07. Nov 2008 23:15|
|Last Modified:||13. Feb 2013 13:55|
Australian Bureau of Statistics (ABS). Telecommunications Services, Catalogue no. 8148, Canberra, AGPS.
Bhattacharya, C.B., 1998. When customers are members: customer retention in paid membership contexts. Journal of the Academy of Marketing Science 26, 31–44.
Cai, Y., Deilami, I., Train, K., 1998. Customer retention in a competitive power market: Analysis of a ‘double-bounded plus follow-ups’ questionnaire. Energy Journal 19, 191–215.
Communications Economics Research Program (CERP), 1997. CERP Internet Report, Department of Economics, Curtin Business School.
Department of Industry, Science and Tourism (DIST), 1998. Stats. Electronic Commerce in Australia, Canberra, AGPS.
Department of Communications, Information Technology and the Arts (DoCITA), 1998. Internet congestion and pricing: A preliminary study, Information Paper 2, Canberra: AGPS.
Economist 1997. Trapped in a web, Economist 342, 8 March, 8, The Economist Newspaper Limited.
Greenstein, S., 1998. Universal Service in the Digital Age: The Commercialization and Geography of US Internet Access. NBER Working Paper, no. 6453, National Bureau of Economic Research, Cambridge.
Katz, E., Aspden, P., 1998. Internet dropouts in the USA. Telecommunications Policy 22, 327–339.
Katz, E., Aspden, P., 1997. Barriers to and motivations for using the Internet: results of a national opinion survey. Research Journal: Policy and Applications 7, 170–188.
Kridel, D., Rappoport, P., Taylor, L., 1998. An econometric study of the demand for access to the Internet. Presented at the Twelfth Biennial Conference of the International Telecommunications Society, Stockholm, 21–24 June.
Li, S., 1995. Survival analysis. Marketing Research 7, 17–23.
Madden G., Savage, S.J., Forthcoming. Internet Pricing and Traffic Demand. In: Bohlin, E., Brodin, K., Lundgren, A., Thorngren B. (Eds.), Beyond Convergence: Communication into the Next Millennium, Elsevier Science: Amsterdam.
Madden, G., Simpson, M., 1997. Residential broadband subscription demand: An econometric analysis of Australian choice experiment data. Applied Economics 29, 1073–1078.
McElvey, W., Zavoina, R., 1981. A statistical model for the analysis of ordinal level dependent variables, Journal of Mathematical Sociology, Summer, 103–120.
McFadden, D., 1981. Econometric models of probabilistic choice. In: Manski, C., McFadden, D. (Eds.), Structural Analysis of Discrete Choice with Econometric Applications, The MIT Press, Cambridge, pp. 198–272.
Montgomery, G., 1998. Enter AOL and a new web era, The Australian, 13 October, 48, News Limited. Organisation for Economic Co-operation and Development (OECD), 1997. Communications Outlook Volume 1, OECD, Paris.
Rust, R.T., Zahorik, A.J., 1993. Customer satisfaction, customer retention and market share. Journal of Retailing 69, 193–215.
Srinivasan, M., 1996a. New insights into switching behavior. Marketing Research 8, 27–33.
Srinivasan, M., 1996b. Keeping your customers, B&E Review, Oct.–Dec., 7–11.
Strategis Group, 1998. Internet Users Willing to Pay to Keep Current ISP, Press Release, November 10.
Telstra Corporation Limited, 1998. Annual Report 1998, Telstra Corporation Limited, Melbourne.
Wyner, G.A., 1996. Customer valuation: Linking behavior and economics. Marketing Research 8, 36–38.
Zeithaml, V., Leonard, L., Parasuraman, A., 1996. The behavioural consequences of service quality. Journal of Marketing 60, 31–46.