# Sicap Enters The World Of Artificial Intelligence To Reduce Telecom Churn
Author:  Pal Sinha, Barnali 
Author URL: https://financedigest.com/author/pal-sinha-barnali
Published: 2017-08-31
Category: NEWS
Category URL: https://financedigest.com/category/news
Meta Title: Reduce Telecom Customer Churn with Sicap AI Engine
Meta Description: Discover how Sicap's AI Engine can predict and reduce customer churn, saving mobile operators millions of euro annually through targeted incentives and
URL: https://financedigest.com/sicap-enters-the-world-of-artificial-intelligence-to-reduce-telecom-churnhtml

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_Mobile operators lose millions of euro every year, due to customer churn. Global telecom solution provider, Sicap is pioneering AI Engine, an artificial intelligence enabler, which reduces churn upon first application._

Sicap is launching the artificial intelligence enabler, _Sicap_ _AI Engine_, which when combined with TargetMe, Sicap’s customer engagement automation solution helps mobile operators to predict and reduce customer churn.

Customer churn is a major [global economic](https://www.financedigest.com/putin-says-west-is-triggering-a-global-economic-crisis.html "Putin says West is triggering a global economic crisis") issue in the telecom industry and operators must address it. If not properly managed, churn leads to significant loss of [revenue and blocks the growth](https://www.financedigest.com/blood-bag-tube-sealer-market-to-witness-excellent-revenue-growth-overview-emerging-trends-and-forecast-by-2028.html "Blood Bag Tube Sealer Market to Witness Excellent Revenue Growth, Overview, Emerging Trends and Forecast by 2028") of all operators. Economic loss caused by churn is twofold. Firstly, operators lose any [future revenue](https://www.financedigest.com/microbial-rennet-market-overview-2022-2029-top-manufacturers-cagr-value-future-scope-revenue-growth-rate-and-forecast.html "Microbial Rennet Market Overview 2022-2029 (Top Manufacturers, CAGR Value, Future Scope, Revenue, Growth Rate and Forecast)") that a churned customer would provide and secondly, all marketing funds used to acquire the customer in the first place are lost.

A typical [mobile operator with an ARPU of €30 in a mature market](https://www.financedigest.com/augmented-reality-ar-virtual-reality-vr-to-dictate-the-growth-of-mobile-operating-tables-market.html "Augmented Reality (AR)/Virtual Reality (VR) to dictate the growth of Mobile Operating Tables Market") and subscriber acquisition cost of €270, loses a total of 18% of their annual revenue due to churn, when one assumes an industry average annual churn rate of 24%. The lost subscriber acquisition cost is [€65-million](https://www.financedigest.com/warner-bros-discovery-adds-2-million-subscribers-in-first-quarter.html "Warner Bros Discovery adds 2 million subscribers in first quarter") per year for one million subscribers, before calculating the lost future revenue.

Sicap AI Engine predicts and identifies churn-prone subscribers, by combining customer-related big data, statistical and analytical techniques and self-learning neuronal networks. The AI Engine makes use of customer data provided by Sicap’s device and SIM management platforms, as well as [operators’ other internal and external data sources](https://www.financedigest.com/exclusive-ardian-explores-taking-italian-tower-operator-inwit-private-sources.html "Exclusive-Ardian explores taking Italian tower operator INWIT private-sources").

Before the AI Engine is deployed, its neuronal network system is [trained by using an operator’s](https://www.financedigest.com/uk-brings-train-operator-transpennine-under-temporary-state-control.html "UK brings train operator TransPennine under temporary state control") historic data. To increase the prediction accuracy over time, the training is continued using the operator’s actual data.

The solution provides a churn prediction [list including potential causes for churn and subscriber segments](https://www.financedigest.com/london-stock-exchange-pours-cold-water-on-merging-listing-segments.html "London Stock Exchange pours cold water on merging listing segments"), based on their likelihood to churn within certain confidence intervals. The results are then used to automatically engage customers with [targeted and personalized incentive programmes and offers](https://www.financedigest.com/amazon-offers-shoppers-10-to-pick-up-purchases-as-it-targets-delivery-costs.html "Amazon offers shoppers  to pick up purchases as it targets delivery costs"), depending on the segment the subscriber belongs to. Accurate targeting results in more relevant offers, and prevents customers from churning.

The results gathered from the first [artificial intelligence](https://www.financedigest.com/types-of-artificial-intelligence.html "artificial intelligence")-powered churn reduction proof of concepts are convincing. Using predictive and adaptive data models, the subscribers who are likely to churn were identified with 85% precision. Several demographics were identified having higher-than-average churn probability, for example: youngsters, married people, subscribers with a higher call [drop rate](https://www.financedigest.com/australian-jobless-rate-drops-but-lockdowns-muddy-the-data.html "Australian jobless rate drops, but lockdowns muddy the data") and more customer care complaints, and those who do not subscribe to additional services.

The identification of the right set of models and parameters for prediction is dependent of the available data. There are numerous modelling techniques for predicting customer churn, which vary in terms of statistical techniques and variable selection methods. Each mobile [operator is unique and Sicap’s data analysts will work closely with customers to identify the best possible statistical techniques for each client](https://www.financedigest.com/white-bullet-appoints-stuart-dickinson-as-director-of-advertising-operations-and-client-success.html "White Bullet appoints Stuart Dickinson as Director of Advertising Operations and Client Success").

“When properly adapted with a mobile operator’s device, SIM and other data, our predictive churn reduction solution has the potential to save our customers tens of [millions of euro](https://www.financedigest.com/spains-king-felipe-reveals-2-6-million-euros-in-wealth-in-bid-to-make-royal-house-more-transparent.html "Spain’s King Felipe reveals 2.6 million euros in wealth in bid to make Royal House more transparent") annually by targeting the right customers, with the right incentives, at the right moment,” says Markus Doetsch, the CEO of Sicap. “Our [aim is to begin with several churn reduction pilot projects](https://www.financedigest.com/metas-zuckerberg-unveils-ai-projects-aimed-at-building-metaverse-future.html "Meta’s Zuckerberg unveils AI projects aimed at building metaverse future") with selected operator customers over the next few months.” Doetsch concludes.


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