Abstract:
In this modern world the telecommunication industry plays an important role. At the
same time, the telecommunication industry is facing a serious problem of losing its
potential customers. Customer relationship management is the combination of practices,
strategies and technologies that companies employ to manage and analyze customer
interactions and data throughout the customer lifecycle. Customer retention is one of
the most difficult challenges in the telecommunications industry. Most researchers focus
on developing suitable models to classify customers based on their profitability levels
for many different businesses. This study has proposed a supervised machine learning
approach for the classification of telecommunication customers based on profitability.
Three classes namely high profitable customers, low profitable customers, and average
profitable customers were considered based on their purchasing behaviours. Around
10,000 post-paid subscriber details with 12 attributes were collected and analyzed
in the study. As a result, the classification technique has been used to reduce the
size of the feature set and to classify them based on profitability. Various supervised
machine learning algorithms were applied on the data set to choose the best algorithm
for developing the final prediction model. Decision Tree, LightGBM, Random Forest,
Support Vector Machine, XGBoost, AdaBoost, Na¨ıve Bayes, CatBoost, Artificial Neural
Network, and K-Nearest Neighbor algorithms were considered for the analysis. Out of
10,000 pre-paid subscribers, 5000 are high profitable customers, 3000 are low profitable
customers, and the remaining 2000 are average profitable customers, with the Support
Vector Machine algorithm outperforming all other classification algorithms. It generated
the best results, yielding the highest accuracy (77.80%) while producing a low error
rate of 22.20%. Accordingly, the Support Vector Machine algorithm was identified for
developing the final prediction model for the telecommunication customer classification
based on profitability.
