Subscriber churn in the Australian ISP market

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.

Abstract

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
• Language: English
• Keywords: Internet; customer churn; pricing
• Subjects: L - Industrial Organization > L9 - Industry Studies: Transportation and Utilities > L96 - Telecommunications; O - Economic Development, Innovation, Technological Change, and Growth > O3 - Innovation ; Research and Development ; Technological Change ; Intellectual Property Rights > O33 - Technological Change: Choices and Consequences ; Diffusion Processes; C - Mathematical and Quantitative Methods > C9 - Design of Experiments > C93 - Field Experiments

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