Churn prediction in telecom using Random Forest and PSO based data balancing in combination with various feature selection strategies

The telecommunication industry faces fierce competition to retain customers, and therefore requires an efficient churn prediction model to monitor the customer's churn. Enormous size, high dimensionality and imbalanced nature of telecommunication datasets are main hurdles in attaining the desired performance for churn prediction. In this study, we investigate the significance of a Particle Swarm Optimization (PSO) based undersampling method to handle the imbalance data distribution in collaboration with different feature reduction techniques such as Principle Component Analysis (PCA), Fisher's ratio, F-score and Minimum Redundancy and Maximum Relevance (mRMR). Whereas Random Forest (RF) and K Nearest Neighbour (KNN) classifiers are employed to evaluate the performance on optimally sampled and reduced features dataset. Prediction performance is evaluated using sensitivity, specificity and Area under the curve (AUC) based measures. Finally, it is observed through simulations that our proposed approach based on PSO, mRMR, and RF termed as Chr-PmRF, performs quite well for predicting churners and therefore can be beneficial for highly competitive telecommunication industry. (C) 2012 Elsevier Ltd. All rights reserved.