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Subscriber churn in the Australian ISP market

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Author Info

  • Madden, Gary
  • Savage, Scott J.
  • Coble-Neal, Grant

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.

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File URL: http://www.sciencedirect.com/science/article/B6V8J-3X11072-4/2/b5c9ebf7f1dadb05061424a67c297688
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Bibliographic Info

Article provided by Elsevier in its journal Information Economics and Policy.

Volume (Year): 11 (1999)
Issue (Month): 2 (July)
Pages: 195-207

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Handle: RePEc:eee:iepoli:v:11:y:1999:i:2:p:195-207

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Web page: http://www.elsevier.com/locate/inca/505549

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References

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  1. Madden, Gary G & Simpson, Michael, 1997. "Residential broadband subscription demand: an econometric analysis of Australian choice experiment data," MPRA Paper 11936, University Library of Munich, Germany.
  2. Shane Greenstein, 1998. "Universal Service in the Digital Age: The Commercialization and Geography of U.S. Internet Access," NBER Working Papers 6453, National Bureau of Economic Research, Inc.
  3. Katz, James E & Aspden, Philip, 1998. "Internet dropouts in the USA: The invisible group," Telecommunications Policy, Elsevier, vol. 22(4-5), pages 327-339, May.
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Cited by:
  1. Pereira, Pedro & Ribeiro, Tiago, 2011. "The impact on broadband access to the Internet of the dual ownership of telephone and cable networks," International Journal of Industrial Organization, Elsevier, vol. 29(2), pages 283-293, March.
  2. Baranes, Edmond & Bourreau, Marc, 2005. "An Economist's Guide to Local Loop Unbundling," MPRA Paper 2510, University Library of Munich, Germany.
  3. Nakamura, A., 2011. "Estimating switching costs after introducing Fixed-Mobile Convergence in Japan," Information Economics and Policy, Elsevier, vol. 23(1), pages 59-71, March.
  4. Filippo Belloc & Antonio Nicita & Maria Alessandra Rossi, 2009. "Whither Broadband Policy? In Search of Selective Intervention," Department of Economics University of Siena 567, Department of Economics, University of Siena.
  5. Gans, Joshua S., 2000. "Network competition and consumer churn," Information Economics and Policy, Elsevier, vol. 12(2), pages 97-109, June.
  6. Filippo Belloc & Antonio Nicita & Maria Alessandra Rossi, 2011. "The Nature, Timing and Impact of Broadband Policies: a Panel Analysis of 30 OECD Countries," Department of Economics University of Siena 615, Department of Economics, University of Siena.

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