Predicting Telecom Customer
Retention using Machine Learning
Mohd Arman*, Rohan Gupta**, Rahul Bhandari**, Ms. Deepti Sahu**
Department of Computer Science Engineering
Sharda University, Uttar Pradesh
armansheakh987@gmail.com
Abstract
In the competitive telecom industry, predicting and
managing customer churn is vital for effective retention
strategies. This research explores machine learning
algorithms—Logistic Regression, Support Vector
Machines, Random Forest, K-Nearest Neighbor, and
Naive Bayes—for telecom customer churn prediction. The
project starts with problem understanding and
exploratory data analysis, visualizing data for insights.
Multiple classifiers are trained and evaluated using AUC
scores and ROC curves. Among them, the Random Forest
Classifier performs exceptionally well with an AUC of
~96%. Telecom providers prioritize customer attrition
analysis as a key business metric. Machine learning
algorithms, analyzing factors like subscribed services,
tenure, gender, and payment method, assist in predicting
churn. The Random Forest model, with an accuracy of
~96%, precision of ~96% for retained customers, and
~94% for churned customers, proves effective. This
research not only contributes valuable insights into the
domain of telecom customer churn prediction but also
underscores the practical application of machine learning
algorithms in addressing real-world business challenges.
Keywords
Churn prediction system, Machine learning,
Telecommunication industry, Retention, Logistic Random
Forest.
Introduction
Customer churn prediction stands as a critical concern within
the telecommunications industry due to its profound impact on
both customer retention and overall revenue. Developing an
effective churn prediction model is a time-consuming yet
essential process, addressing the multifaceted domain of
customer churn, including its effects, causative factors,
business imperatives, methodologies, and prediction
techniques.
In the study conducted by Gopal, Priya & MohdNawi, Nazri
(2023), they introduce an innovative hybrid model that
integrates Convolutional Neural Networks (CNN) and a
modified Variational Autoencoder (VAE) to enhance the
classification of high-dimensional churn data. The model's
effectiveness is evaluated on six benchmark datasets,
demonstrating notable efficacy in handling high-dimensional
and imbalanced time series data.
Usman, Muhammad (2018) proposes a novel churn
prediction and retention model using fuzzy classifiers,
achieving 98% accuracy in churner classification. The
model automatically generates intelligent retention
campaigns based on customer usage and complaint
patterns, showcasing a holistic approach to customer
relationship management. (Usman, 2018)
Pandithurai, O., Ahmed, H. H., S, H. N., Sriman, B., R,
S. (2023) addresses customer churn in large-scale
industries, proposing a machine learning model that
predicts potential churn. The paper compares different
classification models, including Logistic Regression
and Random Forest, emphasizing key performance
metrics to guide effective decision-making. (al P. e.,
2023)
Sharma, A., Gupta, D., Nayak, N., Singh, D., Verma,
A. (2022) conducts a study comparing the accuracy of
various machine learning techniques in predicting
customer churn. The research proposes an algorithm
based on these techniques, aiming to identify major
causes for customer churn and suggesting ways for
enterprises to improve customer retention. (al S. e.,
2022)
Ahmad, Abdelrahim Kasem; Jafar, Assef; Aljoumaa,
Kadan (2019) advances the conversation with a churn
prediction model utilizing machine learning techniques
on a big data platform. The model achieves a
commendable 93.3% AUC, emphasizing the practical
relevance of incorporating social network dynamics
into churn prediction models. (al, 2019)
Suhanda, Yogasetya; Nurlaela, Lela; Kurniati, Ike;
Dharmalau, Andy; Rosita, Ita (2023) rounds off the
discussion with a focus on predictive customer retention
using the random forest algorithm. The study's results,
indicating approximately 81.12% customer retention and
18.87% customer churn, highlight the algorithm's
effectiveness. The identification of customer_activity as
the most influential feature on customer retention provides
actionable insights for telecom companies striving to
enhance their customer retention strategies.
 Related Work
To identify the most suitable classifier, a thorough
Title Authors Publicatio Remark model comparison was conducted. This evaluation
n Date
Improved CNN for Churn Gopal, Priya & 2023 Hybrid CNN-VAE involved calculating the Area Under the Curve (AUC)
Analysis MohdNawi, Nazri model enhances
classification of high-
score and plotting Receiver Operating Characteristic
dimensional churn data, (ROC) curves for each trained model. The Scikit-Learn
demonstrating efficacy
on benchmark datasets. library, a robust and widely used Python machine
ML in Telecom for Churn Joolfoo, Muhammad 2020 Logistic regression and learning library, was instrumental in implementing
Prediction KNN with big data
achieve 80% accuracy, these classifiers due to its efficiency and user-friendly
71% AUC in predicting
telecom customer churn. features.
Fuzzy-Based Churn Usman, Muhammad 2018 Fuzzy classifiers yield
Prediction Model 98% accuracy,
automating intelligent A well-defined problem statement and business case
retention campaigns
based on customer
were established to provide context and underscore
behavior. the significance of churn prediction in the
ML for Telecom Churn Pandithurai et al 2023 ML model predicts
Prediction churn, comparing telecommunication industry. Understanding the
Logistic Regression and
Random Forest with key
business implications guided the subsequent stages of
performance metrics. the research.
ML Techniques for Sharma et al 2022 Comparative study on
Customer Retention ML techniques for
customer churn,
proposing an algorithm
The data preparation phase involved importing
for improving retention. necessary libraries, acquiring datasets, and conducting
ML in Big Data for Churn Ahmad et al 2019 Churn prediction model
Prediction on big data with social Exploratory Data Analysis (EDA) to unveil insights
network analysis into the dataset's characteristics. Subsequent data
achieves 93.3% AUC.
Predictive Analysis with Suhanda et al 2023 Random Forest predicts visualization techniques were employed to present
Random Forest 81.12% customer
retention, identifying
meaningful patterns and correlations within the dataset,
customer_activity as a aiding in the identification of potential predictors of
key feature
churn.

Methodology Data preprocessing ensured that the dataset was in an

The methodology employed in this research encompassed
several key steps to comprehensively address the task of
predicting telecom customer churn using machine learning
classifiers. The initial phase involved gaining a thorough
understanding of various machine learning classifiers,
including Logistic Regression, Support Vector Machines, and
Random Forest. This foundational knowledge was essential
for making informed decisions during subsequent stages of the
research.
optimal format for model training. This step included
handling missing values, encoding categorical
variables, and scaling features as necessary. Multiple
machine learning models, such as Logistic Regression,
Support Vector Machine, Random Forest Classifier, K-
Nearest Neighbor, and Naive Bayes Classifier, were
then trained and evaluated using the prepared dataset.

Figure 2: LOGISTIC REGRESSION CLASSIFIER

Figure 1: Methodology
Figure 3: SUPPORT VECTOR MACHINE (SVM)
Figure 4: K-NEAREST NEIGHBOUR (KNN)
Figure 5: Confusion Matrix(Random Forest)
Figure 6: Confusion Matrix(Naive Bayes)
Performance evaluation was a critical step, involving
the assessment of each model using metrics like
accuracy, precision, recall, F-measure, and ROC
curves. This thorough analysis facilitated the selection
of the most effective model for predicting telecom
customer churn.
The research concluded with a comprehensive
comparison of the trained models, identifying the
model that demonstrated superior performance in the
context of predicting churn in the telecommunication
industry. Limitations were acknowledged, and
potential avenues for future research were highlighted,
ensuring a well-rounded and insightful exploration of
the chosen problem domain.
Figure 5: The graph represents that Random Forest
algorithm produced the best AUC. Therefore,
Random Forest model did a better job of classifying
the churned/retained telecom customers.
Conclusion and Result:
In conclusion, the Random Forest Classifier emerged as the
most effective model among the trained classifiers for
predicting telecom customer churn. The evaluation metrics
demonstrated its robust performance in accurately classifying
customers into retained and churned categories.
The Random Forest Classifier yielded the following scores:
Accuracy: Approximately 96% label accuracy,
indicating the overall correctness of predictions.
Precision: Approximately 96% precision in correctly
identifying retained customers and around 94%
precision in identifying churned customers. This
reflects the model's ability to minimize false positives.
Recall: Approximately 99% recall for retained
customers, signifying the model's capacity to capture
the majority of actual retained customers. The recall for
churned customers was approximately 76%, indicating
the model's ability to correctly identify a significant
portion of customers who actually churned.
It is noteworthy that while the Random Forest Classifier
exhibited high performance, there is room for further
enhancement through the application of advanced
optimization techniques such as "Grid Search." Grid Search
involves an exhaustive search over a specified hyperparameter
grid, allowing for the identification of the most optimal model
configuration.
Resource for understanding Grid Search: Hyperparameter
Optimization with Random Search and Grid Search
This project's success in predicting customer churn highlights
the potential of machine learning algorithms in addressing
critical business challenges within the telecom industry. The
findings provide valuable insights for telecom service
providers seeking to implement effective customer retention
strategies and optimize operational efficiency.
Accuracy: ~96% label
accuracy
Precision: ~96% labeled as ~94% labeled as
Retained churned
customers customers
Recall: ~99% labelled ~76% labeled as
as Retained churned
customers customers
References
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Improved Convolutional Neural Network for
Churn Analysis." International Journal of
Advanced Computer Science and Applications,
14.
https://doi.org/10.14569/IJACSA.2023.0140921.
2. Joolfoo, Muhammad (2020). "Customer Churn
Prediction in Telecom Using Machine Learning in
Big Data Platform.
3. Usman, Muhammad (2018). "A Fuzzy-Based
Churn Prediction and Retention Model for Prepaid
Customers in Telecom Industry." International
Journal of Computational Intelligence Systems,
11, 66-78. https://doi.org/10.2991/ijcis.11.1.6.
4. Pandithurai, O., Ahmed, H. H., S, H. N., Sriman,
B., R, S. (2023). "Telecom Customer Churn
Prediction Using Supervised Machine Learning
Techniques." 2023 International Conference on
Advances in Computing, Communication and
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https://doi.org/10.1109/ACCAI58221.2023.1020
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Retention Rate Employing Machine Learning
Techniques." 2022 1st International Conference
on Informatics (ICI).
https://doi.org/10.1109/ICI53355.2022.9786903.
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Aljoumaa, Kadan (2019). "Customer Churn
Prediction in Telecom Using Machine Learning in
Big Data Platform." Journal of Big Data, 6(1), 28.
https://doi.org/10.1186/s40537-019-0191-6.
7. Suhanda, Yogasetya; Nurlaela, Lela; Kurniati, Ike;
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