This statistic highlights AT&T’s Mobility Churn Rate. The telecom giant has regularly registered lower churn rates in its Postpaid divisions as compared to its Prepaid division, since second quarter of 2016 (Q2 2016) till the most recent quarter of 2020. The difference between AT&T’s Mobility Churn Rate amongst its prepaid and postpaid segments has come in around 20-25 basis points in most of the quarters between 2016 and 2020. This indicates a general correlation between the two metrics.
As far as seasonality is concerned, it’s evident from the chart that AT&T’s Mobility Churn Rate declined in Q2 of 2016, 2017 and 2018. The metric has risen sharply in Q3 of 2016, 2017 and 2018 continuously. This recurring trend indicates that these these troughs and peaks are more of a seasonal trend for AT&T rather than being just general anomalies.
Churn rate is the percentage rate at which users stop using a company’s business, within a given period. It is also known as the rate of attrition or customer churn. It is computed as follows:
|churn rate(%) = (users at the beginning of the period – users at the end of the period )/users at the beginning of the period %|
Importance of tracking AT&T Mobility churn rate
Churn rate is a very important metric within a subscriber based business such as the telecommunications industry. A high churn rate could adversely affect profit and suppress growth. Many factors could cause a high churn rate such as high cost, poor customer interface, and stiff competition among others. In addition to identifying such problematic issues, churn rate also helps in finding out customer lifetime value and the customer retention rate.
AT&T Mobility Churn Rate as a metric
A relatively lower churn rate would be a positive performance indicator. An ideal churn rate would be one that is well below the growth rate of a company.
Analysis of performance of AT&T’s Mobility Churn Rate
AT&T’s postpaid subscription, coupled with other mobile devices had an increase in churn rate from 1.08% in Q2 FY 2019, to 1.19% in Q3 FY 2019. Since the second quarter of FY 2016, the highest quarterly customer churn experienced by the company in the above segment, was of 1.24% during the last quarter of FY 2018. In Q4 FY 2017, this figure stood at 1.11%, while in the year before that, it was 1.15%. The lowest churn rate over the past 3 years occurred in Q2 FY 2016, totaling 0.97%. The highest rise in churn rate took place from the second to the third quarter of 2018 by 0.15%.
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