Telecom Customer Churn Cost Calculator - Prepaid and Postpaid Benchmarks
Telecom loses up to 50% of its customer base per year. Here is the full cost calculation including device subsidy waste - a cost that generic calculators miss entirely.
The short answer
The telecom industry averages roughly 20-25% customer churn per year, but the number splits sharply by plan type. Contract postpaid customers churn at about 10-20% annually (the major US carriers ran near 1% a month in Q4 2025), while prepaid and MVNO customers churn at 50-70% annually because there is no contract or device subsidy holding them in place.
Industry blended
20-25% / yr
~1.5% / mo
Postpaid (contract)
10-20% / yr
~1% / mo
Prepaid / MVNO
50-70% / yr
4-6% / mo
Sources: carrier Q4 2025 results (AT&T postpaid phone churn 0.98%, T-Mobile 1.02%, AT&T prepaid churn 2.89% monthly); industry annual churn range from telecom retention analyses (15-25%).
Telecom Churn Cost Calculator
Total annual churn cost
$718K
1,440 customers churned per year at 1.2% monthly
Direct Revenue Loss
$94K
CAC Waste
$288K
Device Subsidy Waste
$336K
Device subsidy waste calculated as: churned customers x (subsidy x remaining contract fraction). This is the unrecovered subsidy at point of churn.
Prepaid vs Postpaid Churn: A Structural Difference
Prepaid
Monthly
4-6%
Annual
50-70%
No contract. No device subsidy. Price-driven. Customer can port immediately.
Postpaid
Monthly
0.8-1.7%
Annual
10-20%
Device subsidy creates a switching cost. Credit investment aligns carrier and customer. Contract terms add friction.
Why Telecom Churn Costs More Than the ARPU Suggests
Device subsidies are upfront losses
A $800 flagship phone subsidized to $200 creates a $600 upfront loss per postpaid acquisition. If that customer churns at month 6 of a 24-month plan, the carrier has recovered only $300 of the subsidy via plan markup. The remaining $300 is a direct write-off.
Network investment per retained customer
The cost of 5G infrastructure, spectrum licenses, and tower leases is amortized over customer tenure. A churned customer who leaves before 18 months has not contributed their fair share of fixed network costs.
Upsell opportunity loss
Retained postpaid customers are the primary audience for higher-tier plans, international add-ons, device accessories, and family plan expansions. Each churned postpaid customer eliminates this upgrade path permanently.