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Granular ARPU

Remember when wireless providers would just report on "Additional Subscribers"? Ahh those were the heady days of wireless adoption…. Then, the next wireless metric was "Net Subscribers" to account for churn and make a more accurate portrait of the health of the wireless provider. Now we see monthly growth and churn numbers relating to subscribers.

Revenue is headed down a similar track. First it was just "plain old top-line revenue" ( POTLR??.... nahhhh ). Next it was average revenue per user (ARPU) to account for the distribution of that revenue across the subscriber base. Now, it appears that the ARPU will be further segmented into different product lines as a way to measure the health of a wireless organization.

A recent study investigates how ARPU for western European carriers is being used to show how each product line (voice, SMS, data) is supporting the revenue figures. This study could be the first step toward more standardized granular ARPU reporting to the investment community and by association the general public.

NOTE – I still think that average margin per user (AMPU) is the better metric. However, segmented ARPU is a great way to go for a next step for reporting. Telecoms will spend many years before they can embrace a standard cost per user model that will be required for AMPU.

Technorati Tags: Telecommunications, Telecom, ARPU, average revenue per user, metrics

  Posted by jmyers on September 17, 2007 8:00 AM |

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