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Bundling and Consumer Churn in Telecommunications Markets

Author

Listed:
  • Grzybowski Lukasz

    (Telecom Paris, Institut Polytechnique de Paris, 19 place Marguerite Perey, 91120Palaiseau, France)

  • Liang Julienne

    (Orange, 78 rue Olivier de Serres, Paris Cedex 15, 75505, France)

  • Zulehner Christine

    (University of Vienna, Telekom Paris, Wifo Vienna and CEPR, Oskar-Morgenstern-Platz 1, 1090Vienna, Austria)

Abstract

In this paper, we analyze how fixed-mobile (quadruple-play) bundling impacts the decision of consumers to churn telecommunications services. We use a database from an European operator of fixed and mobile telecommunications services which includes information about 9.6 million fixed broadband subscribers and 14.2 million mobile subscribers between March 2014 and February 2015. These data is combined with socio-demographic characteristics from each municipality in this country. We find that consumers who bundle fixed and mobile services from the same provider are less likely to churn. Without fixed-mobile bundling the annual churn of fixed broadband consumers would increase from 8.4 to 9.2%. Furthermore, the consumer churn in the mobile market would increase from 11.5 to 13.1%. We conclude that in the current competitive environment in the country considered, bundling has a moderate impact on consumer retention on both fixed and mobile networks.

Suggested Citation

  • Grzybowski Lukasz & Liang Julienne & Zulehner Christine, 2021. "Bundling and Consumer Churn in Telecommunications Markets," Review of Network Economics, De Gruyter, vol. 20(1), pages 35-54, March.
    • Handle: RePEc:bpj:rneart:v:20:y:2021:i:1:p:35-54:n:3
    DOI: 10.1515/rne-2021-0032
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    More about this item

    Keywords

    quadruple-play; bundling; consumer churn;
    All these keywords.

    JEL classification:

    • L13 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Oligopoly and Other Imperfect Markets
    • L50 - Industrial Organization - - Regulation and Industrial Policy - - - General
    • L96 - Industrial Organization - - Industry Studies: Transportation and Utilities - - - Telecommunications

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