Churn rate in the telecommunications industry

Reference no: EM13990401

'Churn' is a term used to describe the rate at which a company loses customers to its competitors. In the telecommunications industry, it is believed that the churn rate between cellphone service providers (e.g. Vodacom, MTN, Virgin Mobile, 8.ta and Cell C) is not more than 15%.

A telecommunications analyst surveyed a random sample of 560 cellphone subscribers and found that 96 of them had changed service provider within the past year.

(a) Is there sufficient statistical evidence at the 10% significance level to conclude that the churn rate in the telecommunications industry exceeds 15%? Perform a hypothesis test for a single proportion and report the findings.

(b) Use the NORMSDIST function in Excel to compute the p-value for the test. Interpret the findings for the telecommunications analyst.

Reference no: EM13990401

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