February 2, 2012

Using Cloud Services To Fight Churn

Adopting cloud-based services can help operators reduce churn by as much as 50 percent, according to data on customer behavior monitored by mobile-cloud-telephony provider fonYouTelecom.



With almost 500,000 customers now using fonYou services across three networks, the operator says it’s been able to track user behavior and compare churn rates against industry norms along with looking at changes in ARPU.

Right now, fonYou provides cloud telephony services in Spain and South Africa. In Spain, the company has its own Virtual Mobile Network and also provides a second-line service to Telefonica for the Movistar network that can be downloaded as an app from the App stores or activated through traditional channels on any type of handset. In South Africa, fonYou’s platform is used to drive mobile network operator Cell-C’s MyTools service, which provides a range of cloud-based services to the operator’s customers.

Examining figures from the last six months, fonYou CEO Fernando Nunez Mendoza notes there is no doubt that the addition of a cloud-based second line service or the adoption of cloud storage and service-management tools both reduces churn and increases ARPU. 



“In terms of churn, the numbers vary between pre-pay and contract customers,” he adds, “and there are some differences that are age- and gender-related. We have found churn reduction is at its greatest among the younger contract customers, with rates among those in the 25-30 age group falling by as much as 50 percent.”

fonYou’s data shows that churn was reduced across all customer groups by between 20 percent and 50 percent, with an average reduction of around 30 percent. With accepted industry-norm figures putting the cost of churn at nearly $400 per customer per year, fonYou believes that the potential savings available to operators through churn reduction are considerable.



Furthermore, in terms of increased ARPU, fonYou says customers using the its cloud-based services make as many as 35 additional calls each month. 

“Again, there are variations regarding the different types of contract,” comments Mendoza, “but from the numbers we are seeing, it would be reasonable to assume an average ARPU increase of more than $3 per customer per month.”