McKinsey · Strategy · Medium · 25-35 min

Saudi Telco Losing Postpaid Subscribers

Saudi Telco Losing Postpaid Subscribers is a medium McKinsey strategy case interview that runs 25-35 min. A tier-1 Saudi telco. A strong answer works through 5 phases: State a hypothesis upfront about what is driving the 4× gap; Decompose churn; Identify the controllable drivers and how big each one is (pricing, service, network, B2B mix shift, new-entrant offers); Sequence interventions; Top-down recommendation.

Last updated 2026-09-05

The brief

A tier-1 Saudi telco. Postpaid annual churn has climbed from 4% to 8% over eighteen months while the two main competitors hold steady at 2%. Prepaid is flat. Postpaid ARPU is roughly four times prepaid. The CEO wants the gap closed inside a year. Network NPS has actually improved over the same period. You have one analyst, two weeks, and access to subscriber, billing, and care data.

How to approach it

  1. State a hypothesis upfront about what is driving the 4× gap — do not ask for data first
  2. Decompose churn — by segment, tenure, plan type, reason code — and say which cut would confirm or kill the hypothesis
  3. Identify the controllable drivers and how big each one is (pricing, service, network, B2B mix shift, new-entrant offers)
  4. Sequence interventions — retention offers, plan re-architecture, care fix — by ARPU-weighted impact and feasibility
  5. Top-down recommendation — three priorities, not ten — with the ARPU prize quantified

What a strong answer does

  • Leads with an actual hypothesis (e.g. 'I think this is a service issue concentrated in 12–24 month tenure customers') before requesting any data
  • Asks for churn cut by segment / tenure / reason code rather than asking 'can I see the data'
  • Notices that postpaid ARPU 4× prepaid makes retention the dominant lever and prioritises accordingly
  • Stays MECE on drivers — no overlapping buckets, no obvious gaps
  • Pyramid structure on the recommendation — single answer first, three reasons, supporting facts

Red flags interviewers score down

  • Uses 'improve customer experience' or 'enhance digital channels' without specifying what or for whom
  • Jumps to retention offers before structuring the problem
  • Lists ten initiatives instead of prioritising three
  • Never quantifies the ARPU-weighted prize — the case is unscoreable without it

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