The Average Revenue per User (ARPU) is an indicator used by service providers to measure the potential revenue that they can obtain from their subscribers. ARPU is calculated by dividing the revenue by the number of subscribers that provide this revenue. Increasing the ARPU is not only beneficial to the operators; it is also a good way to increase the satisfaction of the subscribers using mobile data services.
There are basically many ways to increase the ARPU:
- By reducing existing costs
- Network shaping: with a precise knowledge of what their users do on the network, operators are able to size and design their network according to their real needs, and not according to supposedly uniform usages. Therefore, data networks can then be seen as real manageable assets from the company’s perspective. This does not impact directly on the ARPU but has an effect on the AMPU (average margin per user) and radically changes the way operators plan their return on investment.
- By increasing service usage
Solving provisioning problems: this enables subscribers to use services that they previously could not use because of wrong settings in their phones. When MMS and WAP provisioning problems occur they are often unnoticed for several days. Instead of waiting a subscriber to complain or the next investigation campaign to detect those issues, operators can now see in real time all the users with provisioning issues since their first missed attempt to connect to the desired service. In other words, an operator able to resolve these issues quickly and efficiently can retain customers and increase its ARPU. Another way to monetize this proactive tracking is by pushing Over The Air the correct settings directly to the customers. - Optimizing the bearer (by making the service more effective and flowing).
- Optimizing the service (is the WAP portal well dimensioned, how long do the subscribers stay on the WAP portal …)
- By doing some intelligent mobile marketing
Because the “average” user is somehow a myth due to the variety of services and behaviors, it is crucial to understand how those services are used by each individual subscriber.- Proposing tailored content to users. This can be achieved by analyzing which URL the subscribers have been visiting
- Understanding the overall experience and interests of subscribers
- Identifying VIP subscribers (i.e. the 5% most spending WAP users or the 2% most service using subscribers..). Specific policies can be defined case by case according to operators’ targets.
- By addressing customer complaints
The faster these complaints are processed and solved, the more subscribers will be eager to spend time and money using mobile data services. This highly impacts the overall subscriber satisfaction. A fancy way to both generate new revenues and increase customers experience at the same time is to push the correct settings OTA. In that respect, customer care is a key point for increasing revenues.
As we can see, the key to increasing ARPU is information ... information on the network and the subscribers activity. Service providers armed with more information about their customer’s usage of data services have more flexibility in catering these services to their subscribers.
Overall, ARPU remains today the industry standard for Telecom as an accurate method of tracking data, service use, and revenue potential. However, evaluating solely by ARPU, gives the impression that all customers are subscribing to the same amount of services. This kind of incorrect reasoning can seriously affect decisions process when deciding which services to maintain or discontinue.
With Deep Packet Inspection (DPI) it is now possible to gather much more information and create complex benchmarks to evaluate the current and potential revenue from a given network and take the right decision to truly manage the customer experience.
