Subscriber churn remains a top challenge for wireless carriers. These
carriers need to understand the determinants of churn to confidently apply
effective retention strategies to ensure their profitability and growth. In
this paper, we look at the effect of peer influence on churn and we try to
disentangle it from other effects that drive simultaneous churn across friends
but that do not relate to peer influence. We analyze a random sample of roughly
10 thousand subscribers from large dataset from a major wireless carrier over a
period of 10 months. We apply survival models and generalized propensity score
to identify the role of peer influence. We show that the propensity to churn
increases when friends do and that it increases more when many strong friends
churn. Therefore, our results suggest that churn managers should consider
strategies aimed at preventing group churn. We also show that survival models
fail to disentangle homophily from peer influence over-estimating the effect of
peer influence.Comment: Accepted in Seventh ASE International Conference on Social Computing
(Socialcom 2014), Best Paper Award Winne
