Multi-Layer Perceptron and Radial Basis Function Networks in Predictive Modeling of Churn for Mobile Telecommunications Based on Usage Patterns

Abstract

Customer retention is a key priority for mobile telecommunications companies, as acquiring new customers is significantly more costly than retaining existing ones. A major challenge in this field is predicting customer churn—users discontinuing services. Traditional predictive models such as rule-based systems often struggle with the complex, non-linear nature of customer behavior. To address this, we propose the use of deep learning techniques, specifically multi-layer perceptron (MLP) and radial basis function (RBF) networks, to improve the accuracy of churn predictions. However, while neural networks excel in predictive performance, they are often criticized for being “black-box” models, lacking interpretability. A real-world data set is considered, which originally contained information about 15,000 randomly selected clients. Various network structures and configurations are analyzed. The obtained results are compared with results generated using fuzzy rule-based and rough-set rule-based systems. The MLP model achieved an almost perfect accuracy of 0.999 with an F-measure of 0.989, outperforming traditional methods such as fuzzy rule-based and rough-set systems. Although the RBF model slightly lagged in accuracy, it demonstrated a superior recall of 0.993, indicating better identification of potential churners. These results demonstrate that neural network models significantly enhance predictive performance in churn modeling. The interpretability of the model is also discussed since it bears significance in real applications. Our contribution lies in showing that deep learning methods significantly enhance churn prediction accuracy, though the challenge of model interpretability remains a critical area for future work.