Competing risk model for mobile phone service

Since the Korean government implemented the “Number Portability System” in the domestic mobile communications market, mobile communication companies have been striving to hold onto existing customers and at the same time to attract new customers. This paper presents a competing risk model that considers the characteristics of a customer in order to predict the customer's mean residual life under the “Number Portability System.” Competing causes for churning considered are pricing policy, quality of communication, and usefulness of service. It has been observed that the customers who pay more are less sensitive to pricing policy; younger people are less sensitive than older people to the change of the quality of communication; and women are more sensitive than men in terms of usefulness of service. We expect that the result of this study can be used as a guideline for effective management of mobile phone customers under the number portability system.