Soft-Churn: Optimal Switching between Prepaid Data Subscriptions on E-SIM support Smartphones

One new trending feature of Smartphones is the support for E-SIM (Embedded Subscriber Identification Module) cards. These allow the user to simultaneously subscribe to multiple cellular providers while also supporting at most one physical SIM (Subscriber Identification Module) card. This feature allows customers to easily switch between providers and is especially useful for those who use prepaid plans which are popular in developing countries. A customer may have multiple providers and, at any point in time, can choose the provider with the most cost effective data plan. This means that cellular providers must now take into account “soft-churn”, where the consumer dynamically switches between multiple plans from multiple providers, in addition to the more traditional churn where a consumer switches providers. This means that data pricing for such consumers must now be more personalized in order to be competitive and maximize profits. We determine the optimal personalized prepaid plan for such users while providing a competitive advantage to the provider. Examples are provided to demonstrate the benefit and numerical results corroborate our premise that these personalized pricing plans can, in fact, increase provider revenue.